In General, Firms Should Use Their Weighted Average Cost of Capital

question 4

True/False

In general, firms should use their weighted average cost of capital (WACC) to evaluate capital budgeting projects because most projects are funded with general corporate funds, which come from a variety of sources.However, if the firm plans to use only debt or only equity to fund a particular project, it should use the after-tax cost of that specific type of capital to evaluate that project.

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Definitions:

Global Entrepreneurship Monitor

An international research initiative that assesses the state of entrepreneurship ecosystems in various countries around the world.

Entrepreneurial Intentions

The cognitive state and planning towards the creation of new business ventures or the introduction of innovations within existing enterprises.

Perceived Capabilities

An individual's belief in their ability to succeed in specific situations or accomplish a task.

Entrepreneurial Intentions

Refers to the determination and motivation an individual has toward starting a new business or venture.