Asked by
Lisandra Galarza
on Dec 01, 2024Verified
Which of the following would increase the WACC?
A) an increase in flotation costs
B) a decrease in tax rates
C) a decrease in preferred dividends
D) Both a & b
E) All of the above
Flotation Costs
Expenses incurred by a company when it issues new securities, including fees to underwriters, legal fees, and registration fees.
WACC
The Weighted Average Cost of Capital (WACC) is a calculation of a firm's cost of capital, where each category of capital is proportionately weighted.
Tax Rates
The percentage at which an individual or corporation is taxed, which can vary based on the taxable amount or income.
- Explain factors that affect the Weighted Average Cost of Capital (WACC).
Verified Answer
GM
Learning Objectives
- Explain factors that affect the Weighted Average Cost of Capital (WACC).