Under Which of the Following Circumstances Might the WACC Valuation

question 41

Multiple Choice

Under which of the following circumstances might the WACC valuation method be the most useful?

• A)when the firm negotiates a better interest rate on its debt than it should have received
• B)when the firm is forced to pay a higher interest rate on its debt than is "fair"
• C)when the firm's debt ratio is expected to remain fairly constant in the future
• D)Both B and C are instances in which the WACC valuation method will be the most useful.

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