Previous Page Next Page Page 8 of 20 Question 8 (2 points) SST Corp is considering borrowing some additional money to finance an investment This additional debt borrowing will change their capital structure which will mean their WACC will change. Beyond the change in SST's capital weights, how else might the WACC be impacted? As leverage increases, the debt is less risky, so debtholders are likely to demand a lower return. As debtholders are paid only after shareholders, increasing debt will have limited impact on equity shareholders. Increasing leverage raises the debt-equity ratio and increases the financial risk to shareholders resulting in a higher beta. None of the above. Previous Page Next Page Page 8 of 20 arch hp