Which of the Following Best Reflects the Correct Cost of Debt

question 47

Multiple Choice

Which of the following best reflects the correct cost of debt used to calculate a firm's WACC?

• A)The before-tax cost of debt, which is higher than the after-tax cost, is used as the component cost of debt for purposes of developing the firm's WACC.
• B)The after-tax cost of debt, which is higher than the after-tax cost, is used as the component cost of debt for purposes of developing the firm's WACC.
• C)The before-tax cost of debt, which is lower than the after-tax cost, is used as the component cost of debt for purposes of developing the firm's WACC.
• D)The after-tax cost of debt, which is lower than the after-tax cost, is used as the component cost of debt for purposes of developing the firm's WACC.

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Definitions:

Compare Instructions

Instructions in programming that are used to compare two values and determine the relationship (equal, greater than, or less than) between them.

GRT Instruction

An instruction in programming languages, such as ladder logic for PLCs, that stands for "greater than" when comparing two values.

Dest

Short for "destination," often used in programming or networking to refer to the target location for data storage or transmission.