If a Company Fails to Accurately Predict It's Cost of Equity

question 8

Multiple Choice

If a company fails to accurately predict it's cost of equity, then

• A) the firm's WACC will also be inaccurate.
• B) the firm may not be using the proper interest rate to estimate NPV.
• C) the firm my incorrectly accept or reject projects based on decisions made using the cost of capital computed with an incorrect cost of equity.
• D) all of the above are true.

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