Which of the following is NOT a capital component when calculating the weighted average cost of capital (WACC) for use in capital budgeting?
A) Accounts payable.
B) Retained earnings.
C) Common stock.
D) Preferred stock.
E) Long-term debt.

Question

Quizplus · Accepted Answer

Accounts payable are not a capital component as they represent a liability and not a source of financing. The capital components used in calculating WACC include retained earnings, common stock, preferred stock, and long-term debt.

Which of the Following Is NOT a Capital Component When