The Capital Structure Weights Used in Computing the Weighted Average

question 52

Multiple Choice

The capital structure weights used in computing the weighted average cost of capital are:

• A) constant over time provided that the debt-equity ratio changes in unison with the market values.
• B) based on the face value of the firm's debt.
• C) computed using the book value of the long-term debt and the shareholder's equity.
• D) based on the market value of the firm's debt and equity securities.
• E) limited to the firm's debt and common stock.

---

Definitions:

Multitasking

The ability or act of handling more than one task simultaneously or switching between tasks quickly.

Reticular Formation

A network of nerve pathways in the brainstem involved in consciousness, sleep-wake cycles, and filtering out repetitive, non-essential stimuli.

Studying

The act of devoting time and attention to acquiring knowledge on a subject, especially through reading and analyzing material.

Pons

A part of the brainstem that plays a key role in controlling breathing, communication between different parts of the brain, and sensations such as hearing.