WHICH OF THE FOLLOWING STATEMENTS ABOUT THE WEIGHTED AVERAGE COST OF CAPITAL (WACC) CALCULATIONS ARE FALSE?

1 - THE BOOK VALUE OF DEBT IS MOST APPROPRIATE TO USE IN DETERMINING THE CAPITAL STRUCTURE WEIGHTS FOR WACC

2 - THE AFTER TAX COSTS OF SECURITIES ARE USED TO CALCULATE WACC

3 - IF A PROJECT IS FINANCED BY ISSUING NEW DEBT, THEN WACC IS EQUAL TO THE AFTER TAX COST OF DEBT

POSSIBLE ANSWERS: A) 1 ONLY B) 2 ONLY C) 3 ONLY D) 1 AND 3 E) NONE OF THE ABOVE