Question: The difference between the weighted average cost of capital ( WaCC ) and the asset cost of capital ( ahe called pretax Wacc ) is:

The difference between the weighted average cost of capital (WaCC) and the asset cost of capital (ahe called pretax Wacc) is:
A. the weighted-average cost of capital is based on the after-tax cost of equity and the precas WaNCC is basted on the atter tax cost of debe.
8. the weighted-average cost of capital multiples the cost of equity and the cota of debe by (1-eax rate) and the pretax wacc does not.
C. tho wolghtod averago cost of capltat muktiplos the cogt of detor by it-tax ratel and ehe preluc forct does noe.
D. the weighted-average cost of capital multiplies the component costs of equity and diber by theur wetht in the capital structure, and the pretax Wotcc does no
The difference between the weighted average cost

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!