When determining a firm's weighted average cost of capital (wacc) which of the following terms is NOT necessary?

Question

Quizplus · Accepted Answer

Accumulated depreciation is not necessary in determining a firm's weighted average cost of capital (WACC). WACC takes into account the cost of both equity and debt financing, and the weights of each to find the overall cost of capital. This means that A and C are necessary to calculate WACC, as they are factors in determining the weight of equity and debt financing. However, accumulated depreciation is not a factor in WACC, as it relates to the accounting treatment of depreciation expenses and does not affect the cost of capital.

When Determining a Firm's Weighted Average Cost of Capital (Wacc)