8. Which of the following statements is most correct? a. Since stockholders do not generally pay corporate taxes, corpor
Posted: Tue Nov 16, 2021 8:17 am
8. Which of the following statements is most correct?
a. Since stockholders do not generally pay corporate taxes,
corporations should focus on before-tax cash flows when calculating
the weighted average cost of capital (WACC).
b. When calculating the weighted average cost of capital, firms
should include the cost of accounts payable.
c. When calculating the weighted average cost of capital, firms
should rely on marginal costs rather than historical costs of
capital.
d. Answers a and b are correct
e. None of the answers above is correct.
a. Since stockholders do not generally pay corporate taxes,
corporations should focus on before-tax cash flows when calculating
the weighted average cost of capital (WACC).
b. When calculating the weighted average cost of capital, firms
should include the cost of accounts payable.
c. When calculating the weighted average cost of capital, firms
should rely on marginal costs rather than historical costs of
capital.
d. Answers a and b are correct
e. None of the answers above is correct.