An Estimated WACC Computed Using Some Sort of Proxy for the Average

question 48

Multiple Choice

An estimated WACC computed using some sort of proxy for the average equity risk of the projects in a particular business unit is known as the:

• A) Business unit WACC
• B) Pure play beta
• C) Divisional WACC
• D) Component cost

---

Definitions:

Homeostasis

The self-regulating process by which biological systems maintain stability while adjusting to conditions that are optimal for survival.

Thermometer

An instrument for measuring and indicating temperature.

Thermostat

a device used to regulate the temperature of a system so that the system's temperature is maintained near a desired set-point.

Drive-Reduction Theory

Approach to motivation that assumes behavior arises from physiological needs that cause internal drives to push the organism to satisfy the need and reduce tension and arousal.