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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Definitions:

Rape Victim

An individual who has been subjected to rape, which is a form of sexual assault involving non-consensual intercourse.

Sexual Harassment

Unwanted sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature that can affect an individual's employment, education, or personal life.

Victims

Individuals who have suffered harm, injury, or injustice, whether physically, emotionally, or by other means, often as a result of criminal acts or other wrongdoing.

Date Rape

Sexual penetration with a dating partner that occurs against the victim’s will, with force or the threat of force.