Multiple Choice
Which of these statements is true regarding divisional WACC?
A) Using a divisional WACC vs a WACC for the firm's current operations will result in quite a few incorrect decisions.
B) Using a simple firmwide WACC to evaluate new projects would give an unfair advantage to projects that present more risk than the firm's average beta.
C) Using a simple firmwide WACC to evaluate new projects would give an unfair advantage to projects that present less risk than the firm's average beta.
D) Using a firmwide WACC to evaluate new projects would have no impact on projects that present less risk than the firm's average beta.
Correct Answer:
Verified
Correct Answer:
Verified
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