If a Firm Uses Its WACC as the Discount Rate

question 204

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 favor low risk projects over high risk projects.

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Definitions:

Calories

A measure of energy from food. It's essential for human health as it powers every action, from thinking to moving.

Trans Fats

A type of unsaturated fat associated with a variety of health risks, commonly found in processed foods.

French Fries

A popular fast food dish made by cutting potatoes into strips and deep-frying them until crispy, often served salted or with various condiments.

Doughnuts

A type of fried dough confectionery or dessert food, typically circular with a hole in the center.