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Using before-tax costs for all components

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Reference no: EM131456817

Which of the following statements is CORRECT?

The WACC is calculated using before-tax costs for all components.

The after-tax cost of debt usually exceeds the after-tax cost of equity.

The WACC that should be used in capital budgeting is the firm's marginal, after-tax cost of capital.

Retained earnings that were generated in the past and are reflected on the firm's balance sheet are generally available to finance the firm's capital budget during the coming year.

The after-tax cost of debt is generally more expensive than the after-tax cost of preferred stock.

Reference no: EM131456817

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