Question

The weighted average cost of capital is defined as the weighted average of a firm's:

pretax cost of debt and equity securities.
cost of equity and its aftertax cost of debt.
bond coupon rates.
return on its investments.
dividend and capital gains yields.

Answer 1

Cost of equity and equity securities is the correct answer.

Step-by-step explanation:

The weighted average cost o capital is defined as the rate at which the company pays to all its security holders for financing its assets. It is also referred to as the firm's cost of capital. Management has no role in deciding it, The external factors decide it. It also represents the minimum return that a company should earn on its assets so that it can satisfy the creditors and owners and invest elsewhere.