Which of the following should NOT be considered when calculating a firm's WACC?
A) After-tax YTM on a firm's bonds
B) After-tax cost of accounts payable
C) Cost of newly issued preferred stock
D) Cost of newly issued common stock

Question

Quizplus · Accepted Answer

The cost of accounts payable should not be considered when calculating a firm's WACC because it is not a form of capital and does not come with a cost of capital. All other options represent sources of capital and should be factored into the WACC calculation.

Which of the Following Should NOT Be Considered When Calculating