A Firm That Uses Its Weighted Average Cost of Capital

question 51

Multiple Choice

A firm that uses its weighted average cost of capital as the required return for all of its investments will:

• A)maintain a constant value for its shareholders.
• B)increase the risk level of the firm over time.
• C)make the best possible accept and reject decisions related to those investments.
• D)find that its cost of capital declines over time.
• E)accept only the projects that add value to the firm's shareholders.

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