FIN 300 Final Exam with Questions and Answers



Which of the following is not considered a capital component for the purpose of calculating the weighted average cost of capital (WACC) as it applies to capital budgeting?

A. Long-term debt

B. Common stock

C. Accounts payable and accruals

D. Preferred stock ANSWER C. Accounts payable and accruals



The weighted average cost of capital for a given capital budget level is a weighted average of the marginal cost of each relevant capital compone...
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