The __________ Form of Budgeting Has the Advantage of Using

question 27

Multiple Choice

The __________ form of budgeting has the advantage of using individuals closer to the work to provide estimates of resource requirements.

• A)top-down budgeting
• B)work element costing
• C)bottom-up budgeting
• D)iterative budgeting

---

Definitions:

Optimal Capital Structure

The best mix of debt, equity, and other financings that maximizes a company's market value while minimizing its cost of capital.

Discount Rate

The rate of interest utilized to calculate the current value of future cash flows within discounted cash flow analysis.

Cost of Capital

A company's expense for acquiring funds and capital, calculated as a weighted average of debt and equity costs.

Debt-Equity Ratio

A measure of a company's financial leverage calculated by dividing its total liabilities by stockholders' equity; it indicates what proportion of equity and debt the company is using to finance its assets.