Which of the following will impact the cost of equity component in the weighted average cost of capital?
A) the risk-free rate
B) beta
C) expected return on the market
D) all of these choices are correct.

Question

Quizplus · Accepted Answer

The cost of equity component in the weighted average cost of capital (WACC) is influenced by the risk-free rate, beta (which measures the stock's volatility relative to the market), and the expected return on the market. These factors are all part of the Capital Asset Pricing Model (CAPM), which is used to calculate the cost of equity.

Which of the Following Will Impact the Cost of Equity