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Which of the following is a limitation to the Weighted Average Cost of Capital approach? Select one: A. An insufficient number of companies use this
Which of the following is a limitation to the Weighted Average Cost of Capital approach? Select one: A. An insufficient number of companies use this method of evaluating their capital structure to trust in its reliability. B. The approach assumes that there will be more than one form of capital in the structure thereby being inapplicable to companies funded solely by common shares. C. Later projects may be rejected as not meeting the hurdle rate because cheaper funding was used up on an earlier project. D. Different investment decisions have different levels of risk and this is not taken into account in the model. E. Capital structures and interest rates are highly dynamic, always creating inconsistency in determining an overall cost of capital
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