Principle of Finance

Which of the following statements regarding coefficient of variation is NOT correct? Coefficient of variation shows the risk per unit of return. The stock with higher coefficient of variation is less risky than the stock with lower coefficient of variation. Coefficient of variation provides a more meaningful risk measure when the expected returns on two alternatives are not the same. Coefficient of variation is the standard deviation divided by the expected return. Which of the following components is NOT considered a capital component for the purpose of calculating the weighted average cost of capital (WACC) as it applies to capital budgeting? Long-term debt Common stock Short-term debt Preferred stock