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The Weighted Average Cost of Capital for a Wholesaler

Question 8

Multiple Choice

The weighted average cost of capital for a wholesaler:


A) is equivalent to the aftertax cost of the firm's liabilities.
B) should be used as the required return when analyzing a potential acquisition of a retail outlet.
C) is the return investors require on the total assets of the firm.
D) remains constant when the debt-equity ratio changes.
E) is unaffected by changes in corporate tax rates.

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