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johnpaech johnpaech
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6 years ago
Which of the following statements is FALSE?
A) The WACC can be used throughout the firm as the company wide cost of capital for new investments that are of comparable risk to the rest of the firm and that will not alter the firm's debt-equity ratio.
B) A disadvantage of the WACC method is that you need to know how the firm's leverage policy is implemented to make the capital budgeting decision.
C) The intuition for the WACC method is that the firm's weighted average cost of capital represents the average return the firm must pay to its investors (both debt and equity holders) on an after-tax basis.
D) To be profitable, a project should generate an expected return of at least the firm's weighted average cost of capital.
Textbook 
Corporate Finance: The Core

Corporate Finance: The Core


Edition: 4th
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pbrown223pbrown223
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6 years ago
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johnpaech Author
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5 years ago
This course drove me insane!
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