Multiple Choice
Which one of the following statements is accurate for a levered firm?
A) WACC should be used as the required return for all proposed investments.
B) A firm's WACC will decrease whenever the firm's tax rate decreases.
C) An increase in the market risk premium will decrease a firm's WACC.
D) The subjective approach totally ignores a firm's own WACC.
E) A reduction in the risk level of a firm will tend to decrease the firm's WACC.
Correct Answer:
Verified
Correct Answer:
Verified
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