Any debt and preferred stock components of capital should
A) use project-specific, not firmwide, WACC figures.
B) use firmwide, not project-specific, WACC figures.
C) use project-specific figures.
D) not be issued.

Question

Quizplus · Accepted Answer

Debt and preferred stock components of capital should use firmwide, not project-specific, Weighted Average Cost of Capital (WACC) figures. This is because the WACC represents the average rate of return the company needs to compensate all its security holders, reflecting the overall cost of capital based on the firm's existing structure and market conditions.

Any Debt and Preferred Stock Components of Capital Should