In general, the the risk of a firm as perceived by its existing and potential investors, the greater is the firm's WACC. The calculation of a firm's WACC should be based on the after-tax cost of the dollar of financial capital raised. It is generally held that the proportions, or weights, used in the calculation of a firm's WACC should be based on the market values of the firm's capital sources. This is because the market value weighting system is more consistent with maximizing the value of the firm's True or False: Privately held firms tend to rely almost exclusively on the use of market value weights in the calculation of their WACCs. True False True or False: The WACC represents the minimum return that a firm should earn on new investments exhibiting its average level of risk. True False