Question

True or false: the most appropriate weights to use in the wacc are book value weights.

Answer 1

This statement is false as the most appropriate weights to use in the wacc are market value weights.  

The weighted average cost of capital (WACC) is the amount that a company anticipates charging on average to all of the holders of its securities in order to fund its assets (WACC).

Each capital source's cost (debt and equity) is multiplied by the appropriate weight by market value when computing WACC, and the results are then added up to arrive at the final calculation.

It matters that the external market, not management, is in charge.

The WACC is the rate of return a company must get on its base of existing assets to appease its owners, creditors, and other financiers; otherwise, they will hunt for alternative investments.

Learn more about WACC here brainly.com/question/25566972

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