Question: On the most basic level, if a firms WACC is 12 percent, what does this mean? In calculating the WACC, if you had to use

  1. On the most basic level, if a firms WACC is 12 percent, what does this mean?
  2. In calculating the WACC, if you had to use book value for either debt or equity, which would you choose? Why?
  3. If you can borrow all the money you need for a project at 6 percent, doesnt it follow that 6 percent is your cost of capital for the project?
  4. Why do we use an aftertax figure for cost of debt but not for cost of equity?

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