1. The weighted average cost of capital A company that has both debt and equity in its capital structure will use its weighted average cost of capital (WACC) as its discount rated Based on your understanding of the weighted average cost of capital, complete the following statements: In general, the the risk of a firm as perceived by its existing and potential investors, the greater is the firm's weighted average cost of capital (WACC) The calculation of a firm's weighted average cost of capital should be based on the after-tax cost of the dollar of financial capital raised It is generally believed that the proportions, or weights, used in the calculation of a firm's weighted average cost of capital should be based on the market values of the firm's capital sources. This is because the market value weighting system is more consistent with maximizing the value of the firm's True or False A firm's weighted average cost of capital (WACC) reflects the composite cost of its debt, preferred stock, and common equilty capital. Oralse Tue True or For The weighted average cost of capital represents the maximum return that a fem should earn on new investments exhibiting the firm's average risk level True False