Which of the Following Statements Regarding the Weighted Average Cost

Multiple Choice

Which of the following statements regarding the weighted average cost of capital is incorrect?

A) The weighted average cost of capital considers the rate of return required by long-term creditors.
B) The weighted average cost of capital considers the rate of return required by investors.
C) The weighted average cost of capital represents the minimum rate of return required by investors and long-term creditors.
D) There is an inverse relationship between the weighted average cost of capital and business risk.