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Komok [63]
4 years ago
10

For purposes of computing the WACC, if the book value of equity exceeds the market value of equity, then: the market value of eq

uity should be used. the book value of equity should be used. the market value of equity less retained earnings should be used. the book value of equity less retained earnings should be used.
Business
2 answers:
vagabundo [1.1K]4 years ago
5 0

Answer:

The market value of equity should be used.

Explanation:

Their are only two methods which are book value method or market value method. The market value method is preferred because the reason is that the market value gives the more accurate numerical value that the securities of the company will give which is the required rate of return to its investors. However historic cost data is not useful because the value of stock and bonds keeps changing every second in the stock exchange and their is the risk that the WACC calculated is inaccurate which implies that the project appraised is also incorrect.

So the best way to calculate the weighted cost of capital is that we should use the fair value of the securities.

poizon [28]4 years ago
3 0

Answer:

For purposes of computing the WACC, if the book value of equity exceeds the market value of equity, then the book value of equity less retained earnings should be used.

Explanation:

Weighted Average Cost of Capital (WACC) is the average rate a company expects to pay to finance its assets.

It is a calculation of a firm's cost of capital in which each category of capital is proportionately weighted

WACC is calculated by multiplying the cost of each capital source (debt and equity) by its relevant weight, and then adding the products together to determine the value.

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Answer:

corporate social responsibilities        

Explanation:

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Although before it was easy to explain CSR as an inner organizational practice or a business ethics technique, the period followed when different international legislation were established and different organizations used their power to move beyond person and even sector-wide programs.

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4 0
3 years ago
What are the two basic styles of firearm actions?
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<span>Single-shot and repeating</span>
6 0
3 years ago
Car salespersons are notorious for using the ________ technique, which involves changing terms after an agreement has been made.
zmey [24]
Car salespersons are notorious for using the lowball technique, which involves changing terms after an agreement has been made.
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4 years ago
alex has to pay his car insurance twice a year. each payment is $312. how much money should alex budget for his insurance each m
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4 years ago
An individual shareholder owns 3,000 shares of Baxter Corporation common stock with a basis of $10 per share. She receives a non
Andreyy89

Answer:

Option "C" is the correct answer to the following statement.

Explanation:

Given:

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= 30,000

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