Q515
Weighted average cost of debt, preferred stock and common equity is classified as
A.
cost of salvage
B.
cost of interest
C.
cost of taxation
D.
cost of capital
AnswerAnswer: Option D
Solution
Answer: Option D
Solution:
Weighted average cost of debt, preferred stock and common equity is classified as cost of capital. Cost of capital is the required return necessary to make a capital budgeting project, such as building a new factory, worthwhile.