Which of the Following Would Be Considered a Contingent Liability

question 124

Multiple Choice

Which of the following would be considered a contingent liability?

• A)Sales tax obligation
• B)Mortgage obligation
• C)Accounts Payable obligation
• D)Pending legal action

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Definitions:

WACC

Weighted Average Cost of Capital, a calculation that reflects the average rate that a company is expected to pay its security holders to finance its assets.

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a dataset, assigning weights accordingly.

Cost of Capital

The expected returns an investor requires to make an investment worthwhile, often used as a benchmark to evaluate the viability of investment projects.

Basic Assumption

A fundamental premise or underlying principle that is taken for granted in the context of a particular model, theory, or methodology.