Which of the Following Statements Is True

Which of the following statements is true?

A) The level of general economic conditions will determine whether a firm should utilise an arithmetic average cost of capital or a weighted average cost of capital.
B) A firm should utilise a weighted average cost of capital for evaluating investment decisions rather than an arithmetic average cost of capital.
C) For an average firm that is capitalised with 65% equity,usage of an arithmetic average cost of capital will usually overstate the true cost of capital.
D) All of the above are true.
E) None of the above is true.