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Author Question: Which of the following statements best describes WACC? (Read 664 times)

sc1250

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on: Aug 7, 2023
Which of the following statements best describes WACC?

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Since debt financing raises the firm’s financial risk, increasing a company’s debt ratio will always increase its WACC.


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Increasing a company’s debt ratio will typically increase the marginal cost of both debt and equity financing. However, this action still may lower the company’s WACC.


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Increasing a company’s debt ratio will typically reduce the marginal cost of both debt and equity financing. However, this action still may raise the company’s WACC.


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Since debt financing is cheaper than equity financing, raising a company’s debt ratio will always reduce its WACC.

Financial Management: Theory and Practice ¦ Brigham, Ehrhardt, Gessaroli, Nason ¦ 4th Edition
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Marked as best answer by sc1250 on Aug 7, 2023

athenaheim

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Reply #1 on: Aug 7, 2023
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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sc1250

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Reply 2 on: Aug 7, 2023
YES! Correct, THANKS for helping me on my review

fatboyy09

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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