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Under Which of the Following Circumstances Might the WACC Valuation

Question 43

Multiple Choice

Under which of the following circumstances might the WACC valuation method be the most useful?


A) when the firm negotiates a better interest rate on its debt than it should have received
B) when the firm is forced to pay a higher interest rate on its debt than is "fair"
C) when the firm's debt ratio is expected to remain fairly constant in the future
D) Both B and C are instances in which the WACC valuation method will be the most useful.

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