Which of the Following Is the Term Used for the Expected

question 34

Multiple Choice

Which of the following is the term used for the expected average future cost of funds?

• A)Optimum capital structure
• B)Financial leverage
• C)WAC
• D)Financial risk

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Definitions:

Interest Tax Savings

The reduction in tax payments resulting from the deduction of interest payments on debt from taxable income.

Discount Rate

In DCF analysis, the rate used to calculate the present worth of future cash flows.

NOPAT

NOPAT (Net Operating Profit After Taxes) is a financial metric that calculates a company's potential cash earnings if it had no debt, focusing on its operational efficiency.

Operating Capital

Funds that are used for daily operational activities of a business, essentially the short-term assets minus short-term liabilities.