Rate of return which is required to satisfy stockholders and debt holders is classified as
A
weighted average cost of interest
B
weighted average cost of capital
C
weighted average salvage value
D
mean cost of capital
Correct Answer: weighted average cost of capital
Rate of return which is required to satisfy stockholders and debt holders is classified as weighted average cost of capital. Weighted average cost of capital ( WACC) is the average after-tax cost of a company's various capital sources used to finance the company.