The weighted average of the ﬁrm's costs of equity, preference shares, and after tax debt is the:

Question

Quizplus · Accepted Answer

The calculation of the weighted average of a firm's costs of equity, preference shares, and after-tax debt is known as the weighted average cost of capital (WACC). The WACC is a crucial metric for companies as it represents the minimum return they must earn on investments to satisfy their shareholders and creditors. Therefore, the correct answer is E, which stands for weighted average cost of capital (WACC).

The Weighted Average of the ﬁRm's Costs of Equity, Preference