The Overall Weighted Average Cost of Capital Is Used Instead

Multiple Choice

The overall weighted average cost of capital is used instead of costs for specific sources of funds because:

A) use of the cost for specific sources of capital would make investment decisions consistent.
B) it is the minimum point for the firms cost of capital given the current equity mix.
C) investments funded by low cost debt would have a disadvantage over other investments.
D) a project with the lowest return would always be accepted under the specific cost criteria.