Homework SourseQ What does the Break Point represent A The point where a fi
Q) What does the Break Point represent?
A. The point where a firm moves from WACC1 to WACC2.
B. The maximum amount of capital that a firm can raise before they run out of retained earnings.
C. The total amount of capital that needs to be invested in a new project.
D. Both A and B are correct.
Solution
Q) What does the Break Point represent?
ANSWER = D) Both A and B are correct.
Break Point represent the point where a firm moves from WACC1 to WACC2 and The maximum amount of capital that a firm can raise before they run out of retained earnings.
