Which of the following is true of the book value of capital in calculating the WACC?

Question

Quizplus · Accepted Answer

The book value of capital reflects the cost of capital that has already been spent, as it is based on the historical accounting value of a company's assets and liabilities. It does not reflect future revenues or predict future cost of capital. It may be used in calculating the WACC, but primarily as a starting point for determining the market value of a company's capital.

Which of the Following Is True of the Book Value