This preview shows page 1. Sign up to view the full content.
Unformatted text preview: : } Market Conditions Level Of Interest Rates Tax Rates Factors The Firm Can Control : Capital Structure Policy Dividend Policy Investment Policy j. Should the company use the composite WACC as the hurdle rate for each of its projects? Answer: No. The composite WACC reflects the risk of an average project undertaken by the firm. Therefore, the WACC only represents the hurdle rate for a typical project with average risk. Different projects have different risks. The projects WACC should be adjusted to reflect the projects risk. Mini Case: 10 - 17...
View Full Document
This note was uploaded on 07/13/2011 for the course FIN 4414 taught by Professor Staff during the Spring '08 term at University of Florida.
- Spring '08