Minimizing the weighted average cost of capital allows management to undertake a larger number of profitable projects, thereby further increasing the value of the firm.

Question

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By minimizing the weighted average cost of capital (WACC), the company is able to lower the financing costs for their projects. This in turn means that they are able to undertake more profitable projects while maintaining a healthy return on investment. Thus, reducing WACC allows the firm to create more value for its shareholders.

Minimizing the Weighted Average Cost of Capital Allows Management to Undertake