Suppose the WACC for a Canadian company is 7.6%,and the Canadian risk-free interest rate is 4%.If the European risk-free interest rate is 2.5%,what is the company's European WACC?

Question

Quizplus · Accepted Answer

The correct answer is A because the European WACC is calculated as the Canadian WACC multiplied by the ratio of the European risk-free interest rate to the Canadian risk-free interest rate. Therefore, the European WACC is 7.6% * (2.5% / 4%) = 6%.

Suppose the WACC for a Canadian Company Is 7