Attempts: Keep the Highest: /2 2. The weighted average cost of capital Aa Aa The importance of knowing a firm's cost of capital Red Lemon Shipbuilders Inc. has two divisions: one is very risky, and the other exhibits significantly less riskThe company uses its investors' overall required rate of return to evaluate its investment projects. It is most likely that the firm will become: O Less risky over time, and its value will increase O Riskier over time, and its value will decrease O Less risky over time, and its value will decrease O Riskier over time, and its value will increase Which of the following statements is correct? O A company needs to adjust the cost of debt for taxes, because interest payments are tax deductible O If a firm wants to lower its cost of debt, it can simply issue debt with a lower coupon rate. O The market value of a firm's debt and equity will continuously change throughout the day, but the book value of debt and equity tends to stay more stable over time. Consequently, the firm should use the book-value weight to define its optimal capital structure