If a Company's WACC Is Less Than the Required Return

question 65

Multiple Choice

If a company's WACC is less than the required return on equity,then the firm:

• A) is financed with more than 50% debt.
• B) is perceived to be safe.
• C) has debt in its capital structure.
• D) is all equity financed.

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Definitions:

Mail Fraud

A criminal act involving the use of postal services or electronic mail to carry out fraudulent schemes with the intent to deceive for personal gain.

False Pretenses

A legal term referring to the act of intentionally misrepresenting the truth to obtain property or money from another.

Misdemeanors

Less serious criminal offenses that are punishable by fines or imprisonment for a period of less than one year.

Petty Offenses

Relate to minor legal violations that typically result in a small fine or other minor penalties.