When We Use the WACC to Assess a Project, We

question 54

Multiple Choice

When we use the WACC to assess a project, we assume that the ________ ratio does not change.

• A) reward to systematic risk
• B) risk to reward
• C) debt to equity
• D) volatility to systematic risk

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Definitions:

Shareholders

Individuals or entities that own shares in a corporation, giving them the right to vote on corporate matters and receive dividends.

Director Serve

The role or term during which an individual serves on a board of directors for an organization or corporation.

Corporate Directors

Individuals elected by shareholders to manage a corporation's affairs and make major decisions.

Articles

Short for "articles of incorporation," which are documents filed with a government body to legally document the creation of a corporation.