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The weighted average cost of capital (WACC) of a firm that has no debt is currently 15%. The CFO is considering raising debt capital. If
The weighted average cost of capital (WACC) of a firm that has no debt is currently 15%. The CFO is considering raising debt capital. If so, what will happen to the WACC? O a. WACC may rise or fall depending on whether equity holders buy or sell based on the news of the debt capital raising O b. WACC will rise above 15% as debt holders require a higher return on their investments Os None of the listed answers are correct Od. WACC will fall below 15% as the debt will produce tax savings Oe WACC will remain at 15% as it represents the business risk of the firm and is unaffected by capital structure
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