Factors that affect the cost of capital equation!

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 can control? Check all that apply. The firm's dividend payout ratio Interest rates in the economy The firm's capital budgeting decision rules Tax rates The Impact of cost of capital on managerial decisions Edinburgh Exports has two divisions, Land H. Division 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 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 or 14%. Division L is considering a project with an expected return of 12.5% a Edinburgh Exports should the Division L's project because its return is the risk-based cost of capital for the division