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:

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A reduction in one's belief in their ability to succeed in specific situations or accomplish a task, which can impact motivation and performance.

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