In capital budgeting analysis,when computing the weighted average cost of capital,the CAPM approach is typically used to find which of the following?
A) Market value weight of equity
B) Pretax component cost of debt
C) After-tax component cost of debt
D) Component cost of internal equity

Question

Quizplus · Accepted Answer

The CAPM approach is used to find the component cost of internal equity, which is a key component in the calculation of the weighted average cost of capital. The market value weight of equity, pretax component cost of debt, and after-tax component cost of debt are typically found using other methods.

In Capital Budgeting Analysis,when Computing the Weighted Average Cost of Capital,the