Why is using the cost of equity to discount project cash flows inappropriate when a firm uses

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Why is using the cost of equity to discount project cash flows inappropriate when a firm uses both debt and equity in its capital structure?
Cost Of Equity
The cost of equity is the return a company requires to decide if an investment meets capital return requirements. Firms often use it as a capital budgeting threshold for the required rate of return. A firm's cost of equity represents the...
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Introduction to Corporate Finance

ISBN: 978-0324657937

2nd edition

Authors: Scott B. Smart, William L Megginson

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