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Discuss Weighted Average Cost of Capital (WACC) by answering these questions: 1. Assume that a firm's cost of capital, is 12%. What does this mean?

Discuss Weighted Average Cost of Capital (WACC) by answering these questions:

1. Assume that a firm's cost of capital, is 12%. What does this mean? What is the difference between a company with a 12% WACC and a company with a 10% WACC?

2. Why are firms constantly working to lower their WACC? What benefits are there for a company with a low WACC?

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