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13. Which of the following statements is correct? a. We ideally would like to use book value to calculate the weight of various component capital
13. Which of the following statements is correct? a. We ideally would like to use book value to calculate the weight of various component capital in estimating the appropriate weighted average cost of capital. b. The WACC represents the historical cost of capital and is usually calculated on a before- tax basis. c. In the weighted average cost of capital calculation, we must adjust the cost of preferred stock for the tax exclusion of 70 percent of dividend income. d. The cost of a new equity issuance (r.) could possibly be lower than the cost of retained earnings (1) if the market risk premium and risk-free rate decline by a substantial amount e. None of the statements above is correct
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