The weighted average cost of capital calculates the average cost of issued or new issuance of debt and equity for a firm.

Question

Quizplus · Accepted Answer

The weighted average cost of capital (WACC) is a calculation used to determine the cost of various types of financing used by a company, including debt and equity. The WACC takes into account the relative proportion of each type of financing used by the company, as well as the cost associated with each type of financing. Therefore, the statement that the WACC calculates the average cost of issued or new issuance of debt and equity for a firm is true.

The Weighted Average Cost of Capital Calculates the Average Cost