题目
The current weighted average cost of capital (WACC) for Van der Welde is 10%. The company announced a debt offering that raises the WACC to 13%. The most likely conclusion is that for Van der Welde:
选项
A.the company’s prospects are improving.
B.equity financing is cheaper than debt financing.
C.the company’s debt\/equity has moved beyond the optimal range.
答案
C
解析
C is correct. If the company’s WACC increases as a result of taking on additional debt, the company has moved beyond the optimal capital range. The costs of financial distress may outweigh any tax benefits to the use of debt. C是正确的。如果WACC因承担额外债务而增加，则公司已超出最佳资本范围。财务困境的成本可能超过使用债务的任何税收利益。