Which of the following should NOT be considered when calculating a firm's WACC?
A) cost of preferred stock
B) after-tax cost of bonds
C) cost of common stock
D) cost of carrying inventory

Question

Quizplus · Accepted Answer

Cost of carrying inventory is not a component of a firm's capital structure and therefore should not be considered when calculating WACC. The correct components are cost of debt (after-tax), cost of preferred stock, and cost of common stock.

Which of the Following Should NOT Be Considered When Calculating