cost of capital (WACC)
Question
What is true regarding the cost of capital (WACC)?
A) Lower WACC decreases firm value because it causes
management to take on too many investment opportunities
B) Higher WACC implies lower risk
C) Lower WACC increases firm value because the present value of the firm’s future cash flows is higher
D) WACC is not related to firm value
E) Higher WACC increases firm value because management accepts more profitable projects