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Question 1: Which of the following is NOT a capital component when calculating the weighted average cost of capital (WACCforuse in capital budgeting? (6 points)
Question 1: Which of the following is NOT a capital component when calculating the weighted average cost of capital (WACCforuse in capital budgeting? (6 points) A) Long-term debt (B) Accounts payable C) Retained earnings (D) Common stock E) Preferred stock Question 2: LaPange.Inc. estimates that its average-risk projects have a WACC of 10%, its below-average risk projects have a WACC of 8%, and its above-average risk projects have a WACC of 12%, which of the following projects (A, B, and C) should the company accept? (6 points (A) Project B, which is of below-average risk and has a return of 8.5% [b] Project C, which is of above-average risk and has a return of 11% C) Project A, which is of average risk and has a return of 9% (D) None of the projects should be accepted E) All of the projects should be accepted
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