Which one of the following factors is not considered in calculating the firm's cost of capital?

Question

Quizplus · Accepted Answer

The book value of debt and equity is not typically used to calculate the firm's cost of capital. Instead, the market values of these securities are used to determine the cost of equity and the cost of debt. The other factors listed (cost of equity, interest rate on debt, the firm's marginal tax rate, and the firm's target debt to equity ratio) are all considered in calculating the firm's cost of capital.

Which One of the Following Factors Is Not Considered in Calculating