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Which of the following is NOT true? Accounts payable is NOT a capital component when calculating the weighted average co
Posted: Sun Jul 03, 2022 12:57 pm
by answerhappygod
- Which Of The Following Is Not True Accounts Payable Is Not A Capital Component When Calculating The Weighted Average Co 1 (47.62 KiB) Viewed 14 times
Which of the following is NOT true? Accounts payable is NOT a capital component when calculating the weighted average cost of capital (WACC) for use in capital budgeting. The WACC only represents the "hurdle rate" for all projects. Therefore, the project's WACC should not be adjusted to reflect the project's risk. A firm can directly affect its cost of capital by changing its capital structure, by changing its dividend policy and by changing its investment policy. Firms with riskier projects generally have a higher WACC.