Concept Questions

15.5a What are the likely consequences if a firm uses its WACC to evaluate all proposed investments?

15.5b What is the pure play approach to determining the appropriate discount rate? When might it be used?

Ross et al.: Fundamentals of Corporate Finance, Sixth Edition, Alternate Edition

VI. Cost of Capital and Long-Term Financial Policy

15. Cost of Capital

© The McGraw-Hill Companies, 2002

CHAPTER 15 Cost of Capital

The Security Market Line (SML) and the Subjective Approach

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