7. Factors that affect the cost of capital equation Each of the following factors affects the weighted average cost of capital (Wacc) equation. Which of the following factors are outside a firmi control? Check all that apply. The general level of stock prices The effect of the tax rate on the cost of debt in the weighted average cost of capital equation The firm's dividend payout ratio The impact of a firm's cost of capital on managerial decisions Consider the following case: National Petroleum Refiners Corporation (NPR) has two divisions, L and H. Division L is the company's low-risk division and monit hwve a weighted average cost of capital of 8% if it was operated as an independent company. Division H is the company's high-riks division and would have a weighted average cost of capital of 14% 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 11%. Division L is considering a project with an expected return of 9.5%. Should National Petroleum Refiners Corporation (NPR) accept or reject the project? Reject the project Accept the project On what grounds do you base your accept-reject decision