In an Investment Center, the Manager Has Responsibility and Authority

question 89

Multiple Choice

In an investment center, the manager has responsibility and authority for making decisions that affect:

• A) costs
• B) revenues
• C) assets
• D) costs, revenues, and assets

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Definitions:

WACC

Weighted Average Cost of Capital; the average rate of return a company is expected to pay to all its security holders to finance its assets.

Par Value

The face value of a bond or stock as stated on the certificate or instrument, which differs from its market value.

WACC Calculation

The process of calculating the Weighted Average Cost of Capital, which measures a firm's cost of capital from all sources, weighted according to the proportion of each capital component.

Annual Coupons

The interest payments made to bondholders annually over the life of the bond.