Which of the Following Is NOT a Capital Component When

question 52

Multiple Choice

Which of the following is NOT a capital component when calculating the weighted average cost of capital (WACC) for use in capital budgeting?

• A) Accounts payable.
• B) Common stock "raised" by reinvesting earnings.
• C) Common stock raised by new issues.
• D) Preferred stock.
• E) Long-term debt.

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Definitions:

Internal Transactions

Financial activities that occur within an organization, affecting the internal accounts without involving any external entity.

Chronological Diary

A record of events or transactions arranged in the order of time occurrence, often used for maintaining personal or financial information.

Economic Events

Transactions and occurrences that affect the financial position of an organization, which can be measured and recorded.

Internal Users

Individuals within an organization, such as management and employees, who use financial and other company information for decision-making purposes.