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When Firms Use Multiple Sources of Capital, They Need to Calculate

Question 1

Multiple Choice

When firms use multiple sources of capital, they need to calculate the appropriate discount rate for valuing their firm's cash flows as


A) a simple average of the capital components costs.
B) a sum of the capital components costs.
C) a weighted average of the capital components costs.
D) they apply to each asset as they are purchased with their respective forms of debt or equity.

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