Which of the following is true regarding the weighted-average cost of capital?

a. The book value of the components of capital should always be used to calculate the weighted-average cost of capital.
b. A company may have two weighted-average costs of capital if the firm's capital structure is so large that new common stock must be sold.
c. The cost of common equity is lower than the cost of retained earnings.
d. The cost of preferred stock is adjusted for the tax deduction associated with preferred dividends.


B

Business

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a. An asset represents a probable future economic benefit. b. Assets are obtained or controlled as a result of past or probable future transactions or events. c. Assets reported on the balance sheet include both monetary and nonmonetary resources. d. Assets include costs that have not yet been matched with revenues.

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Indicate whether the statement is true or false

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