When calculating the weighted average cost of capital, weights are based on
A) book values.
B) book weights.
C) market values.
D) market betas.

Name: When calculating the weighted average cost of capital, weights are based on A) book values. B) book weights. C) market values. D) market betas.
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Question

Quizplus · Accepted Answer

The weights in the weighted average cost of capital (WACC) calculation are based on market values, as they reflect the current cost of financing and the true economic value of the firm's capital structure.

When Calculating the Weighted Average Cost of Capital, Weights Are