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A Company's Weighted Average Cost of Capital

Question 4

Multiple Choice
A company's weighted average cost of capital:

A company's weighted average cost of capital:


A) is equivalent to the aftertax cost of the outstanding liabilities.
B) should be used as the required return when analyzing any new project.
C) is the return investors require on the total assets of the firm.
D) remains constant when the debt-equity ratio changes.
E) is unaffected by changes in corporate tax rates.

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