Question: 1.Define what is WACC. In addition, explain how changes in the economy that make investors more risk averse can affect WACC (think cost of debt

1.Define what is WACC. In addition, explain how changes in the economy that make investors more risk averse can affect WACC (think cost of debt and cost of equity).

2.If a company always uses retained earnings to fund capital equipment, is the cost of capital irrelevant? Explain your answer.

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