How Does the Valuation of a Company Vary from the Valuation

question 37

Multiple Choice

How does the valuation of a company vary from the valuation of a project using WACC?

• A)Book values are used as the weights for WACC when valuing a company.
• B)Debt and equity weights are set equal for WACC when valuing a company.
• C)A terminal value is included in the valuation process for a company but generally not for a project.
• D)Debt is not adjusted for taxes when computing the WACC for a company valuation.
• E)The WACC must be set equal to R_M when valuing a company.

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