Which One of the Following Statements Is Correct for a Firm

question 57

Multiple Choice

Which one of the following statements is correct for a firm that uses debt in its capital structure?

• A)The WACC should decrease as the firm's debt-equity ratio increases.
• B)When computing the WACC, the weight assigned to the preferred stock is based on the coupon rate multiplied by the par value of the preferred.
• C)The firm's WACC will decrease as the corporate tax rate decreases.
• D)The weight of the common stock used in the computation of the WACC is based on the number of shares outstanding multiplied by the book value per share.
• E)The WACC will remain constant unless a firm retires some of its debt.

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Definitions:

Species Decline

The decrease in numbers or genetic diversity of a species, often leading to its potential extinction.

Ecological Restoration

The practice of renewing and restoring degraded, damaged, or destroyed ecosystems and habitats in the environment by active human intervention and action.

Extinct In The Wild

Refers to species that no longer exist in their natural habitat but are maintained in captivity or through artificial propagation.

Acid Deposition

The deposition of acidic components in rain, snow, or dust on the surface of the Earth, often resulting from industrial emissions.