1. The weighted average cost of capital Aa Aa A company that has both debt and equity in its capital structure will use its weighted average cost of capital (WACC) as its discount rate. Based on your understanding of the weighted average cost of capital, complete the following statements: The weighted average cost of capital (WACC) is used in the capital budgeting project evaluation used in the calculation of a project's net present against which a project's internal rate of return (IRR) is process either as the value (NPV) or the compared In general, there is relationship between a firm's risk level and its weighted average cost of capital. True or False: Although firms tend to raise their capital in large, lumpy amounts, their weighted average cost of capital (WACC) and the capital investment that they are evaluating assume that the project will be financed with the same proportion of funds contained in their target capital structure. O False O True True or False: The weighted average cost of capital represents the maximum return that a firm should earn on new investments exhibiting the firm's average risk level. O False O True