WACC Quiz

1. High-tech companies typically use a higher WACC because they rely on high-risk funding.

2. Startups often have a low WACC due to their established market presence.

3. Retail companies typically aim for a low WACC to balance competitiveness and financial flexibility.

4. A stable company often has a consistent WACC due to predictable cash flows.

5. A higher debt-to-equity ratio generally lowers WACC for firms.

6. High WACC is preferable for companies looking for aggressive growth strategies.

7. WACC calculations do not consider the risk-free rate.

8. A company's WACC can be influenced by changes in interest rates.

9. Firms with stable cash flows can take on more debt, which often leads to a decrease in their WACC.

10. Understanding WACC is important for making informed investment decisions.