If a company's WACC is less than the required return on equity,then the firm:

Name: If a company's WACC is less than the required return on equity,then the firm:
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Quizplus · Accepted Answer

This is because WACC takes into account the cost of both debt and equity capital. If the WACC is less than the required return on equity, then it means that the cost of debt is lower than the cost of equity. Hence, the company will have debt in its capital structure as a lower cost of debt reduces the overall cost of capital.

If a Company's WACC Is Less Than the Required Return