When the Market Values of a Firm's Securities Have Been

question 17

Multiple Choice

When the market values of a firm's securities have been changing dramatically,the firm may want to calculate its WACC based on ________.

• A)book value weights
• B)nominal weights
• C)historic weights
• D)target weights

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Definitions:

IAS 36

An International Accounting Standard that prescribes the procedures for accounting for impairments of assets.

Amortized

The gradual reduction of a debt or capital cost over a period, especially through regular payments covering interest and part of the principal.

Intangible Assets

Non-physical assets owned by a business, such as patents, trademarks, copyrights, and goodwill, which have economic value due to their rights or advantages in business operations.

Goodwill

An intangible asset that arises when a business is acquired for more than the fair value of its net identifiable assets.