The first break in the MCC is usually found by dividing planned retained earnings by the proportion of equity in the capital structure.

Question

Quizplus · Accepted Answer

This statement is true. The first break in the MCC (Marginal Cost of Capital) is calculated by dividing planned retained earnings by the proportion of equity in the capital structure. This break indicates the point at which the cost of capital changes, as a company moves from using only debt and equity to using internal funds as well.

The First Break in the MCC Is Usually Found by Dividing