Kelly's Uses the Firm's WACC as the Required Return for Some

question 53

Multiple Choice

Kelly's uses the firm's WACC as the required return for some of its projects.For other projects,the firms uses a rate equal to WACC plus 1 percent,while another set of projects is assigned rates equal to WACC minus some amount.Which one of the following factors should be the key factor the firm uses to determine the amount of the adjustment it will make when assigning the project a discount rate?

• A)Firm beta
• B)Date for project commencement
• C)Risk level of project
• D)Division within the firm that will be assigned to manage the project
• E)Current debt-equity ratio

---

Definitions:

Erectile Disorder

A recurring difficulty in achieving or maintaining an erection sufficient for satisfactory sexual performance.

Sexual Distress

Emotional or psychological discomfort associated with aspects of sexual activity or desire.

Refractory Periods

A period immediately following an action during which a neuron or muscle is unresponsive to further stimulation.

Body Image Problems

Issues related to an individual's perception of the aesthetics or sexual attractiveness of their own body, often leading to psychological distress.