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1.Blank lower/higher

2.Blank lastext

3.Blank shareholder wealth/ balance sheet

4. True or False

5. True or False

1. The weighted average cost of capital Aa Aa A company that has both debt and equity in its capital structure will use its weighted average cost of capital (WACC) as its discount rate. Based on your understanding of the weighted average cost of capital, complete the following statements: the risk of a firm as perceived by its existing and potential investors, In general, the lower the greater is the firm's weighted average cost of capital (WACC) The calculation of a firm's weighted average cost of capital should be based on the after-tax cost of the dollar of financial capital raised. next It is generally believed that the proportions, or weights, used in the calculation of a firm's weighted average cost of capital should be based on the market values of the firm's capital sources. This is because the market value weighting system is more consistent with maximizing the value of the firm's True or False: Privately held firms tend to rely almost exclusively on the use of market value weights in the calculation of their weighted average cost of capital True False True or False: The weighted average cost of capital (WACC) represents the minimum return that a firm should earn ew investments exhibiting its average level of risk. on n False True

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