The weights used to compute the weighted-average required rate of return (WACC) should be obtained using: the
Fantastic news! We've Found the answer you've been seeking!
Question:
The weights used to compute the weighted-average required rate of return (WACC) should be obtained using:
- the book value of a similar risk company
- the market value of debt and equity
- the book values of debt and equity
- the CAPM
If the risk of a firm is identical to the risk of the project, the required rate of return for the firm may be applied to the project. Where the risk of the firm and project differ, a solution is to use:
- the return for the market
- the WACC of the firm
- the return for the industry identical to that of the project
- none of the above
Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1285190907
8th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Posted Date: