Which Statement Is FALSE Regarding WACC and Its Components

question 94

Multiple Choice

Which statement is FALSE regarding WACC and its components?

• A) The cost of debt is usually less than the cost of equity.
• B) The WACC should be used as the discount rate for all projects that the firm considers.
• C) For an all-equity firm, the cost of equity equals the WACC.
• D) The WACC may increase if the firm seeks external financing for a project.

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Definitions:

Indirect Approach

A communication strategy that involves conveying a message in a less straightforward manner, often to ease into sensitive topics or facilitate smoother interactions.

Longer Speeches

Extended oral presentations aimed at informing, persuading, or entertaining an audience.

Indirect Approach

A communication strategy where the main point is not presented directly at the beginning but is gradually introduced through explanation or evidence.

Resistant

Refers to the ability to withstand or oppose a particular force or effect.