Question
Kingston Inc has gotten into the practice of using a different discount rate for various projects. Which of the following statements is correct? A. Negates
Kingston Inc has gotten into the practice of using a different discount rate for various projects. Which of the following statements is correct?
A. Negates the principle goal of creating the most value for the shareholders.
B. May cause the firm's overall weighted average cost of capital to vary over time if the projects accepted change the overall risk level of the firm.
C. Will change the debt-equity ratio of the firm over time.
D. Will cause the firm's overall cost of capital to decrease over time.
E. Will cause the firm's overall cost of capital to remain constant over time.
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