Minimizing the weighted average cost of capital (WACC) is the same as:
A) Maximizing the market value of the firm
B) Maximizing the book value of the firm
C) Maximizing the profits of the firm
D) Maximizing the liquidating value of the firm

Question

Quizplus · Accepted Answer

Minimizing the WACC means reducing the cost of capital for a firm, which in turn increases the present value of future cash flows and enhances the market value of the firm. Therefore, maximizing the market value of the firm is the best choice.

Minimizing the Weighted Average Cost of Capital (WACC) Is the Same