1. what is the WACC's relationship to the discount rate a corporation uses to evaluate an investment?
2. What would happen to a corporation's stock price if its actual return on average-risk investments was consistently higher than its Weighted Average Cost of Capital? And what would happen to the corporation's stock price if its ROI for average-risk investments was consistently lower than its WACC?
3. How would the discount rate used to evaluate a replacement or repair project, such as a leaky roof, be different from the discount rate for an investment in a new product or service? Why would the discount rates differ?