7. Factors that affect the cost of capital equation Each of the following factors affects the weighted average cost of capital (WACC) equation. Which are factors that a firm cannot control? Check all that apply. The firm's dividend payout ratio The firm's capital budgeting decision rules The general level of stock prices The firm's capital structure The impact of cost of capital on managerial decisions Lancashire Railway Company has two divisions, L and H. Division L is the company's low-risk division and would have a weighted average cost of capital of 11% if it was operated as an independent company. Division H is the company's high-risk division and would have a weighted average cost of capital of 17% if it was operated as an independent company. Because the two divisions are the same size, the company has a composite weighted average cost of capital of 14%. Division H is considering a project with an expected return of 15%. Lancashire Rallway Company should the Division H's project because its return is division