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Corporate Finance and Capital Budgeting
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Which of the following is NOT a component of the weighted average cost of capital (WACC)?
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A
Cost of retained earnings
💡 Explanation:
The WACC is calculated using the cost of debt, cost of equity, and cost of preferred stock, weighted by their respective proportions in the capital structure. Retained earnings are not a source of external financing and therefore not included in the WACC calculation.