The weighted average cost of capital (WACC) for a firm is usually used as its corporate discount rate because WACC is the:
A) discount rate which the firm should apply to all of the projects it undertakes.
B) overall rate which the firm must earn on its existing assets to maintain the value of its
Equity.
C) rate the firm should expect to pay on its next bond issue.
D) maximum rate which the firm should require on any projects it undertakes.
E) rate of return that the firm's preference shareholders should expect to earn over the long
Term.
Correct Answer:
Verified
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