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Question 2 2 4 pts Assuming a ompany correctly estimates its WACC at a given point in time and then uses that same cost of
Question pts Assuming a ompany correctly estimates its WACC at a given point in time and then uses that same cost of capital to evaluate all projects for the next years, then the firm will most likely become less risky over time, and this will maximize its intrinsic value. become riskier over time, but its intrinsic value will be maximized. become more risky and also have an increasing WACC. Its intrinsic value will not baximized. accept too many lowrisk projects and too few highrisk projects. continue as before, because there is no reason to expect its risk position or value to change over time as a result of its use of a single cost of capital.
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Assuming a ompany correctly estimates its WACC at a given point in time and then uses that same cost of capital to evaluate all projects for the next years, then the firm will most likely
become less risky over time, and this will maximize its intrinsic value.
become riskier over time, but its intrinsic value will be maximized.
become more risky and also have an increasing WACC. Its intrinsic value will not baximized.
accept too many lowrisk projects and too few highrisk projects.
continue as before, because there is no reason to expect its risk position or value to change over time as a result of its use of a single cost of capital.
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