CFA Practice Question

There are 201 practice questions for this study session.

CFA Practice Question

The lack of debt financing would usually tend to ______ a private company's WACC.
A. increase.
B. decrease.
C. uncertain (can increase or decrease).
Explanation: Private companies may rely more on equity financing which would increase its WACC. The higher cost of debt would have the same impact on its WACC.

User Contributed Comments 1

User Comment
akirchner1 This assumes that debt financing is cheaper than equity financing.
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