In Calculating NPV Using the Flow-To-Equity Approach the Discount Rate

Multiple Choice

In calculating NPV using the flow-to-equity approach the discount rate is the:

A) all-equity cost of capital.
B) cost of equity for the levered firm.
C) all-equity cost of capital minus the weighted average cost of debt.
D) weighted average cost of capital.
E) all-equity cost of capital plus the weighted average cost of debt.