Which one of the following statements is INCORRECT concerning the equity component of the WACC? A. The equity component of WACC reflects the return expected by the company's shareholders. B. Market values should be used in calculating WACC. C. Preferred equity is a separate component of WACC. D. There is no tax shield on the dividends paid.
Added by Mary J.
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WACC is the average rate of return a company is expected to pay its security holders to finance its assets. It includes the cost of equity, cost of debt, and cost of preferred equity. Show more…
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