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A company has two separate business units (80% manufacturing and 20% tech). You have properly calculated the manufacturing WACC = 9.50%, and the tech WACC
A company has two separate business units (80% manufacturing and 20% tech). You have properly calculated the manufacturing WACC = 9.50%, and the tech WACC = 13.60%. Therefore, the companys overall WACC = 10.32%. What might be two different problems if the companys managers use the overall WACC
when evaluating projects.
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Lessons In Corporate Finance
Authors: Paul Asquith, Lawrence A. Weiss
2nd Edition
1119537835, 978-1119537830
