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Target is thinking about opening a new line of 10 high end fashion boutiques. These new stores are expected to be more risky than Target's
Target is thinking about opening a new line of 10 high end fashion boutiques. These new stores are expected to be more risky than Target's current business line. What WACC should Target use to evaluate these new stores?
The same WACC as new projects cannot change a company's WACC | ||
A lower WACC since the new boutiques will not be as large as Target's current stores | ||
A higher WACC since the new stores will be more risky than Target's current businesses | ||
A WACC of zero since these are a new business for Target | ||
Not enough information to decide |
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