The amount of equity ﬁnancing as a percent of the total ﬁnancing is considered, directly or
indirectly, in the weighted average cost of capital.

Question

Quizplus · Accepted Answer

The weighted average cost of capital takes into consideration both the cost of equity and cost of debt financing. Therefore, the proportion of equity financing in the total financing would impact the overall cost of capital for a company.

The Amount of Equity ﬁNancing as a Percent of the Total