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Part C Using Financial Information to Estimate Cost of Capital 1 question (3 points) 5. Critically discuss this statement: A firms WACC reflects the return

Part C Using Financial Information to Estimate Cost of Capital 1 question (3 points)

5. Critically discuss this statement:

A firms WACC reflects the return required by contributors of capital and hence will always be a good benchmark discount rate for assessing new projects being considered by a firm.

Note: A critical discussion requires you to discuss the statement with a critical eye - that is identify the valid and invalid parts of the statement and discussing why the different parts are (or are not) correct.

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