Most Practitioners Would Use Net Debt When Calculating the Weights

question 56

True/False

Most practitioners would use net debt when calculating the weights for the WACC, which is total debt outstanding minus cash and other risk-free securities.

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Definitions:

Rights

Entitlements or freedoms granted by legal, social, or moral principles that are inherent to all human beings.

HDC (Holder in Due Course)

A holder in due course is a party who has acquired a negotiable instrument in good faith and for value, and thus has certain rights above the original issuer or transferee.

Promise

A declaration or assurance that one will do a particular thing or that guarantees a particular outcome.

Promisor

An individual or entity that makes a promise or commitment to perform a specified act or duty in a contract.