The risk tolerance level of investors is considered, directly or indirectly, in the weighted average cost of capital.

Name: The risk tolerance level of investors is considered, directly or indirectly, in the weighted average cost of capital.
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Question

Quizplus · Accepted Answer

The weighted average cost of capital (WACC) reflects the required return on investment, which is influenced by investors' risk tolerance as it affects the cost of equity and debt.

The Risk Tolerance Level of Investors Is Considered, Directly or Indirectly