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EpiscoWhat EpiscoWhat
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6 years ago
Which of the following statements is FALSE?
A) With no debt, the WACC is equal to the unlevered equity cost of capital.
B) With perfect capital markets, a firm's WACC is dependent of its capital structure and is equal to its equity cost of capital only the firm it is unlevered.
C) As the firm borrows at the low cost of capital for debt, its equity cost of capital rises, but the net effect is that the firm's WACC is unchanged.
D) Although debt has a lower cost of capital than equity, leverage does not lower a firm's WACC.
Textbook 
Corporate Finance: The Core

Corporate Finance: The Core


Edition: 4th
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pbrown223pbrown223
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#1
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6 years ago
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EpiscoWhat Author
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6 years ago
Good timing, thanks!
julymontalvo
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Yesterday
this is exactly what I needed
Marcie D
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2 hours ago
I appreciate what you did here, answered it right Smiling Face with Open Mouth
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