Question
The difference between the weighted-average cost of capital (WACC) and the pre-tax (unlevered) WACC is A: the weighted-average cost of capital multiplies the cost of
The difference between the weighted-average cost of capital (WACC) and the pre-tax (unlevered) WACC is
A: the weighted-average cost of capital multiplies the cost of debt by (1-tax rate) and the pre-tax WACC does not.
B: the weighted-average cost of capital is based on the after-tax cost of equity and the pre-tax WACC is based on the after-tax cost of debt.
C: the weighted-average cost of capital multiplies the component costs of equity and debt by their weight in the capital structure, and the pre-tax WACC does not.
D: the weighted-average cost of capital multiplies the cost of equity and the cost of debt by (1-tax rate) and the pre-tax WACC does not.
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Global Finance And The Macroeconomy
Authors: A. Makin
1st Edition
0333736982, 978-0333736982
