The corporate cost of capital is a blend weighted average of

The corporate cost of capital is a blend (weighted average) of the costs of all of a business’s financing sources.

Solution

WACC = Wd×Rd×(1-t)+We×Ke+Wp×Rp

W is weights of respective portfolios

R is return on respective portfolios

Wd+We+Wp = 1

WACC considers only long-term financing. It does not consider short-term financing.

Hence, given statement is False.