Which of the Following Is True Regarding the Weighted-Average Cost

question 18

Multiple Choice

Which of the following is true regarding the weighted-average cost of capital?

• A) The book value of the components of capital should always be used to calculate the weighted-average cost of capital.
• B) A company may have two weighted-average costs of capital if the firm's capital structure is so large that new common stock must be sold.
• C) The cost of common equity is lower than the cost of retained earnings.
• D) The cost of preferred stock is adjusted for the tax deduction associated with preferred dividends.

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Definitions:

Belau

Another name for Palau, an archipelago of over 500 islands in the western Pacific Ocean, known for its rich marine biodiversity.

Melanesian Ceremonial

pertains to the diverse range of traditional rites, practices, and social ceremonies found within the Melanesian islands, reflecting the cultural and spiritual life of the communities.

Woven Grasses

Materials made from various types of grass that are woven together to create objects, textiles, or artworks, showcasing craftsmanship and natural beauty.

Canoe Prow

The front part of a canoe, often artistically designed and carved, especially significant in cultures with strong canoe-building traditions.