How would you describe the basic components of WACC to a group of decision makers in a company? On the most basic level, if a firm’s WACC is 12 percent, what does this mean? In calculating the WACC, if you had to use book values for either debt or equity, which would you choose? Why?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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  • How would you describe the basic components of WACC to a group of decision makers in a company?

  • On the most basic level, if a firm’s WACC is 12 percent, what does this mean?

  • In calculating the WACC, if you had to use book values for either debt or equity, which would you choose? Why?

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