The __________is a schedule or graph relating the firm's weighted average cost of capital to the level of new financing.
A) breaking point
B) weighted marginal cost of capital
C) weighted average cost of capital
D) target capital structure

Question

Quizplus · Accepted Answer

A graph relating the firm's weighted average cost of capital to the level of new financing is known as a weighted marginal cost of capital (WMCC) curve. The WMCC curve plots the total amount of financing available at each level of total capitalization and the weighted average cost of capital associated with each level. The point at which the WMCC curve intersects with the firm's investment opportunity schedule represents the optimal capital structure or weighted average cost of capital for the firm.

The __________Is a Schedule or Graph Relating the Firm's Weighted