Which of the Following Statements Is Correct

question 88

Multiple Choice

Which of the following statements is correct?

• A) The weighted average cost of capital is calculated on a before-tax basis.
• B) An increase in the market risk premium is likely to increase the weighted average cost of capital.
• C) The weights of debt and equity should be based on the balance sheet because this is the most accurate assessment of the valuation.
• D) All of the statements are correct.

Recognize the importance of aligning HR practices with organizational strategies for competitive advantage.

Comprehend the differences between various organizational structures and their strategic implications.

Understand the strategic significance of employee attributes like motivation, personality, and attitude in organizational success.

Recognize the role of top management in strategic planning and execution.

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Definitions:

Myron Gordon

An economist best known for his work on dividend policy and stock valuation, including the Gordon Growth Model which relates a company's dividend policy to its stock valuation.

John Lintner

A prominent economist known for his work on dividend policies and the capital asset pricing model (CAPM).

Dividend Payout Ratio

The proportion of earnings paid out as dividends to shareholders, expressed as a percentage of the company’s total earnings.

Cash Dividend

Cash payments made by a company to its shareholders, usually as a distribution of profits.