Finance theory favors the use of ____________ value weights in the calculation of the weighted average cost of capital.
A) book
B) future
C) market
D) GAAP

Question

Quizplus · Accepted Answer

Finance theory favors the use of market value weights because market values reflect the current market perception of a firm's value, whereas book values may not accurately reflect the current value of the firm's assets and liabilities. Future values are uncertain and subject to change, while GAAP is a set of accounting principles and does not provide weighting guidelines for WACC calculations.

Finance Theory Favors the Use of ____________ Value Weights in the Calculation