True or false? a. If a company uses its company cost of capital to value all projects,

Question:

True or false?

a. If a company uses its company cost of capital to value all projects, it will overestimate the value of high-risk projects.

b. It is okay to use the company cost of capital to value every project as long as the high risks of some projects are offset by the low risks of others.

c. A company can reduce the discount rate for a project by financing it with debt.

Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of... Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...

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