Question 26 (1 point) You show up to a party where the most interesting people are discussing weighted average cost of capital. Naturally, you listen in! Who is misinformed? John says that WACC is almost always lower than either the cost of equity or the cost of debt due to the effects of the tax shield. Bob tells us that WACC is an appropriate discount rate for a project with a beta equal to the firm beta. Sam explains that WACC can apply to a firm that issues common stock, preferred stock, and debt. Jill asserts that a decrease in a firm's WACC will increase the attractiveness of the firm's investment options. Pat expresses the WACC formula as follows: WACC =E/VRe+D/VR(1Tr)+ P/VRp