When Firms Develop a WACC for Individual Projects Based on the Cost

question 348

Multiple Choice

When firms develop a WACC for individual projects based on the cost of capital for other firms in similar lines of business as the project, the firm is utilizing a ____________________.

• A) Subjective risk approach.
• B) Pure play approach.
• C) Divisional cost of capital approach.
• D) Capital adjustment approach.
• E) Security market line approach.

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Definitions:

Barrie Thorne

An American sociologist known for her contributions to the sociology of gender, childhood, and family life.

Glass Ceiling

A social barrier that makes it difficult for women to rise to the top level of management.

Female Managers

Women who hold positions of responsibility and authority in an organization or enterprise.

Top Level

Referring to the highest echelon or rank within a hierarchy or organization, often associated with decision-making authority.