Consider the following equation: r_wacc = r_U - τ_cdr_D The termr_U in this equation is A) the firm's unlevered cost of debt. B) the firm's cost of debt. C) the project's unlevered cost of capital. D) the project's debt-to-value ratio.

Question

Quizplus · Accepted Answer

The term $r_{_{U_{}}}$ represents the project's unlevered cost of capital, as it refers to the cost of capital without the impact of debt financing.

Consider the Following Equation: Rwacc = RU - τcdrD

Consider the Following Equation: R_wacc = R_U - τ_cdr_D