Consider the following equation for the Project WACC with a fixed debt schedule: R_wacc = r_U - dτ_c[rD + f(r_U - r_D)] The term d in this equations represents: A)a measure of the permanence of the debt level. B)the annual adjustment percentage to the amount of debt. C)the debt-to-value ratio. D)the dollar amount of debt outstanding.

Question

Quizplus · Accepted Answer

The term $d$ in the equation represents the debt-to-value ratio, which is a measure of how much debt is used to finance the project relative to the total value of the project.

Consider the Following Equation for the Project WACC with a Fixed