Which of the Following Is Not a Capital Component When

question 30

Multiple Choice

Which of the following is not a capital component when calculating the WACC?

• A)long-term debt
• B)accounts payable
• C)retained earnings
• D)preferred stock

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Definitions:

Equity Investment

An investment in stock or shares representing ownership interest in a company.

Equity Method

An accounting technique used to record investments in other companies, recognizing income in proportion to the investor's share of the company's earnings.

Outstanding Stock

Shares that have been issued by a company and are held by investors, including both public shareholders and company insiders.

Net Income

The total profit of a company after all expenses, including taxes and costs, have been subtracted from total revenues.