Which of the Following Is a Correct Formula for Calculating

question 4

Multiple Choice

Which of the following is a correct formula for calculating the cost of capital?

• A)WACC = weighted after-tax cost of debt + weighted cost of preferred stock + weighted cost of common stock
• B)WACC = weighted after-tax cost of debt + weighted after-tax cost of preferred stock + weighted after-tax cost of common stock
• C)WACC = (after-tax cost of debt + cost of preferred stock + cost of common stock )/3
• D)WACC = weighted cost of debt + weighted cost of preferred stock + weighted cost of common stock