The MCC schedule,as developed from the weighted average cost of capital,has a break point that occurs when retained earnings are used up.

Question

Quizplus · Accepted Answer

The MCC schedule is a graphical representation of the weighted average cost of capital (WACC) at different levels of financing. The break point occurs when the cost of equity financing increases due to the use of retained earnings, which leads to a higher cost of equity. Therefore, the statement is true.

The MCC Schedule,as Developed from the Weighted Average Cost of Capital,has