If a Firm Uses Its WACC as the Discount Rate

question 267

True/False

If a firm uses its WACC as the discount rate for all of the projects it undertakes, then the firm will tend to become riskier over time.

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Definitions:

2-phenylethanamine

An organic chemical compound with the formula C8H11N, acting as a primary amine with a phenyl substituent.

2-phenylethanol

An aromatic alcohol with a floral fragrance, represented by the chemical formula C8H10O, commonly found in essential oils.

Major Organic Product

The primary substance produced in the highest yield in an organic reaction when there are multiple possible products.

Structure

The arrangement of atoms within a molecule, which dictates the molecule's chemical properties and reactions.