A Firm's WACC

question 46

Multiple Choice

A firm's WACC:

• A) is the proper discount rate for every project the firm undertakes.
• B) is used to value all of the firm's existing projects.
• C) is a benchmark discount rate that is adjusted for the riskiness of each project.
• D)is an informational value only and should never be used as a discount rate.

---

Definitions:

Advantages

Benefits or desirables attributes that contribute to the superiority of a product, service, or entity.

Ownership Structure

The arrangement or framework that details the distribution of ownership and the specifics of shareholders' rights in a corporation.

Deferred Income Tax Asset

An accounting term that refers to a situation where a business has paid more taxes to the government than it currently owes due to differences in accounting practices.

Recording Conditions

The criteria or standards that must be met for transactions to be recorded in the financial statements.