the firms weighted average cost of capital WACC is Set by the board of directors
ID: 2650638 • Letter: T
Question
the firms weighted average cost of capital WACC is
Set by the board of directors of the firm because it is the benchmark they use to evaluate upper management.
Regulated by the IRS because tax deductible debt is included in the computation.
Determined by the Financial markets because investors provide the funds used by firms and these funds have costs, shich are returns demanded by investors.
The same as the firms internal rate of return IRR
The total net present value NPV of all the capital budgeting project in the firm invest in any year
Explanation / Answer
the firms weighted average cost of capital WACC is
Ans - Determined by the Financial markets because investors provide the funds used by firms and these funds have costs, shich are returns demanded by investors as Weighted average cost of capital (WACC) is the average rate of return a company expects to compensate all its different investors.
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