Multiple Choice
What would be an important consequence if the CEO of a company required the Finance Department to use a cost of capital rate 2% lower than the true value?
A) The company would accept investment projects that would reduce shareholder wealth.
B) The company would reject investment projects that would increase shareholder wealth.
C) The company would accept investment projects that have a positive net present value.
D) The company would reject investment projects that have a negative net present value.
E) The company would accept investment projects with a higher internal rate of return.
Correct Answer:
Verified
Correct Answer:
Verified
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