Weighted-average cost of capital is the expected rate of return on a portfolio of all the firm's securities, adjusted for tax savings due to interest payments.
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Question

Quizplus · Accepted Answer

The definition provided is correct. The weighted-average cost of capital is a calculation used to determine the minimum return that a company must earn on its investments in order to satisfy its shareholders and investors. It takes into account the cost of debt and equity financing, with the cost of debt being adjusted for tax savings due to interest payments.

Weighted-Average Cost of Capital Is the Expected Rate of Return