Respuesta :
This statement is false as the most appropriate weights to use in the wacc are market value weights.
The amount that a business is anticipated to charge on average to all of the holders of its securities in order to fund its assets is known as the weighted average cost of capital (WACC).
When calculating WACC, the cost of each capital source (debt and equity) is multiplied by the relevant weight by market value, and the results are then added up to reach the final result.
The firm's cost of capital is a popular name for the WACC. It's significant that the external market, not management, controls it.
The WACC is the rate of return that a business must achieve on its base of current assets in order to satisfy its owners, creditors, and other financiers; otherwise, they will look for alternative investments.
Common stock, preferred stock, and related rights, straight debt, convertible debt, exchangeable debt, employee stock options, pension liabilities, executive stock options, government subsidies, and other sources are only a few of the ways that businesses raise capital.
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