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

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Puritan Attitude

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The belief in the moral value and importance of work and its inherent ability to strengthen character.

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A Puritan minister who founded Rhode Island in 1636, advocating for religious freedom, separation of church and state, and fair dealings with Native Americans.