While calculating the weighted average cost of capital, market value weights are preferred because

Related MCQs

• Lei-Feng, Inc.'s $100 par value preferred stock just paid its $10 per share annual dividend. The preferred stock has a current market price of $96 a share. The firm's marginal tax rate (combined federal and state) is 40 percent, and the firm plans to maintain its current capital structure relationship into the future. The component cost of preferred stock to Lei-Feng, Inc. would be closest to .
• In order to calculate Weighted Average Cost of weights may be based on:
• Market values are often used in computing the weighted average cost of capital because
• If the weighting of equity in total capital is 1/3, that of debt is 2/3, the return on equity is 15% that of debt is 10% and the corporate tax rate is 32%, what is the Weighted Average Cost of Capital (WACC)?
• Weighted Average Cost of Capital is generally denoted by:
• The weighted average cost of new or additional capital is called
• According to which theory two identical firms in all respect except their capital structure can not have different market value or cost of capital because of arbitrage process
• According to MM approach, two identical firms in all respects except their capital structure can not have different market values or cost of capital because of-----
• Firm's Cost of Capital is the average cost of:
• A company should arrange the capital structure in such a way that there is maximum flexibility in the capital and cost of capital is