The Weights Used in Calculating the Firm's Weighted-Average Cost of Capital

question 31

Multiple Choice

The weights used in calculating the firm's weighted-average cost of capital are equal to the proportion of debt and equity ____.

• A) used to finance the project
• B) used to finance the projects undertaken last year
• C) in the industry average capital structure
• D) in the firm's target capital structure
• E) none of the above

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Definitions:

Antibonding π Molecular Orbital

A molecular orbital formed when lobes of p orbitals on two atoms combine in a phase mismatch, weakening the bond between the atoms.

Allyl Cation

A positively charged species (ion), specifically a reactive intermediate with the structure CH2=CH-CH2+.

LUMO

The Lowest Unoccupied Molecular Orbital, which is the lowest energy orbital that can accept electrons.

Pentadienyl Cation

A positively charged ion with a structure derived from pentadiene, typically involved in organic reactions.