Yes, virtually all firms are partly financed by at least some nonfinancial liabilities, too. However, the nonfinancial

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Yes, virtually all firms are partly financed by at least some nonfinancial liabilities, too. However, the nonfinancial liabilities may not allow arbitrary use on the margin. Thus, the financial debt may be the marginal method to finance projects. Therefore, we usually do not consider nonfinancial liabilities when we compute theWACC.

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