Which of the following is NOT a key variable in the weighted average cost of capital (WACC) equation?
A) the market value of equity
B) the market value of debt
C) the risk-free rate of return
D) the marginal tax rate

Question

Quizplus · Accepted Answer

The risk-free rate of return is a key component in the calculation of the cost of debt, but it is not directly a part of the calculation for WACC itself. The other variables listed (market value of equity and debt, and marginal tax rate) are all directly included in the WACC equation.

Which of the Following Is NOT a Key Variable in the Weighted