Question: Many CFOs argue that using book value to estimate cost of capital is more conservative than using market value, because the market value of equity

Many CFOs argue that using book value to estimate cost of capital is more conservative than using market value, because the market value of equity is usually much higher than the book value of equity. Is this statement true or false? (Note: a more conservative WACC means a higher WACC.)

Group of answer choices

True

False

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