To calculate the weighted-average cost of capital we need to know
A)the relative percentage of capital provided by each source and the cost of invested capital.
B)the required rate of return and the cost of invested capital.
C)the cost of invested capital and the relative percentage of capital provided by each source.
D)relative percentage of current liabilities and the required rate of return.

Question

Quizplus · Accepted Answer

The weighted-average cost of capital (WACC) is calculated by taking into account the relative percentage of capital provided by each source (such as equity and debt) and the cost of invested capital for each source. Therefore, option A is the best choice, as it includes both of these necessary components. The other options (B and C) only include one of the necessary components, while option D is not relevant to the calculation of WACC.

To Calculate the Weighted-Average Cost of Capital We Need to Know