Multiple Choice
Which of the following statements is correct?
A) If a new project is riskier than the firm's existing projects, then it should be expect to be "charged" a higher cost of capital than the firm's overall WACC.
B) If a new project is riskier than the firm's existing projects, then it should be expect to be "charged" a lower cost of capital than the firm's overall WACC.
C) The project's risk and the cost of capital to which it is compared are independent.
D) None of these answers is correct.
Correct Answer:
Verified
Correct Answer:
Verified
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