In Calculating the NPV Using the Flow-To-Equity Approach the Discount

question 15

Multiple Choice

In calculating the NPV using the flow-to-equity approach the discount rate is the:

• A) all equity cost of capital.
• B) cost of equity for the levered firm.
• C) all equity cost of capital minus the weighted average cost of debt.
• D) weighted average cost of capital.
• E) all equity cost of capital plus the weighted average cost of debt.