With Respect to the WACC

question 2

Multiple Choice

With respect to the WACC:

• A)It is the proper discount rate for everything the company does
• B)It is used to value all new projects
• C)This benchmark discount rate is adjusted for the riskiness of the project
• D)No adjustments need to be made when using it as the discount rate

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Definitions:

Alternative Goods

Products or services that can be used in place of each other; satisfying the same need or want, essentially serving as substitutes.

Elasticity Of Demand

An assessment showing the influence of price adjustments on the quantity demanded of a product.

Price Increase

A rise in the cost of goods or services, often measured as a percentage of the previous price.

Insured For Health Care

Individuals who have health insurance coverage, protecting them against high medical expenses.