The preferred capital structure weights to be used in the weighted average cost of capital are ________.
A) book value weights
B) nominal weights
C) historic weights
D) target weights

Question

Quizplus · Accepted Answer

Target weights are the preferred capital structure weights to be used in the WACC because they represent the company's desired or optimal capital structure, taking into account factors such as risk, cost of capital, and financial flexibility. Book value weights, nominal weights, and historic weights do not necessarily reflect the company's current or future capital structure needs and may not provide an accurate representation of the cost of capital.

The Preferred Capital Structure Weights to Be Used in the Weighted