The weighted-average cost of capital (WACC) equals ________.
A) the after-tax average cost of all the long-term and short-term sources of funds
B) the after-tax average cost of all the long-term source of funds
C) the pre-tax average cost of all the short-term sources of funds
D) the pre-tax average cost of all the long-term and short-term sources of funds

Question

Quizplus · Accepted Answer

WACC is the after-tax average cost of all the long-term sources of funds, including debt and equity.

The Weighted-Average Cost of Capital (WACC) Equals ________