Which of the following is not potentially used in the weighted average cost of capital equation?
A) cost of retained earnings
B) weight of debt
C) average corporate income tax rate
D) marginal tax rate

Question

Quizplus · Accepted Answer

The weighted average cost of capital equation typically involves the cost of debt, cost of equity, and the weight of each component in the company's capital structure. The cost of retained earnings may also be included if the company chooses to use it as a source of financing. The marginal tax rate may be used to calculate the after-tax cost of debt. However, the average corporate income tax rate is not typically used in the equation.

Which of the Following Is Not Potentially Used in the Weighted