QUESTION 17

The WACC of a corporation is calculate with CAPM and found equals to 15%, while when estimated based on the constant growth model was found equals to 16%. Then:

A.

The WACC estimated with CAPM is more accurate

B.

Both are accurate measures of the estimated WACC of the corporation

C.

In this case, WACC is equal to 31%

D.

WACC is more accurate when estimated using Gordon model

E.

The WACC estimated with CAPM is more accurate because risk is considered explicitly