The Weighted Average Cost of Capital Is Used as a Discount

question 1

Multiple Choice

The weighted average cost of capital is used as a discount rate because

• A) it is an indication of how much the firm is earning overall.
• B) as long as the cost of capital is earned, the common stock value of the firm will be maintained.
• C) it is comparable to the prevailing market interest rates.
• D) returns below the cost of capital will cover all fixed costs associated with capital and provide an excess return to stockholders.

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Definitions:

Intellectual Disability

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Special Education

Tailored educational programs designed to meet the unique needs of students with disabilities or learning challenges.

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