The Weighted Average Cost of Capital of a Firm Represents

Multiple Choice

The weighted average cost of capital of a firm represents the:

A) minimum rate of return a firm must earn on average-risk investments to maintain its current value.
B) maximum rate of return a firm can expect to earn on its investments.
C) maximum interest rate a firm should pay on the debt it uses.
D) minimum dividend yield a firm must pay to its preferred stockholders.
E) required rate of return that should be used to evaluate capital budgeting projects that have above-average risk.