Question: If a firm's capital is distributed in equal proportions, meaning 25% long term debt, 25% short term debt, 25% preferred stock and 25% common stock,

If a firm's capital is distributed in equal proportions, meaning 25% long term debt, 25% short term debt, 25% preferred stock and 25% common stock, the WACC is equal to the:

a.The arithmetic average of the required return on each of the components

b.The geometric average of the required return on eachof the components

c.The standard deviation of the required return on eachof the components

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