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

question 51

Multiple Choice

In calculating 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.

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