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Question(s) / Instruction(s):

The weighted average cost of capital for a firm is the:

a)            Discount rate which the firm should apply to all of the projects it undertakes.

b)            Overall rate which the firm must earn on its existing assets to maintain the value of its stock.

c)            Rate of return that the firm\\\'s preferred stockholders should expect to earn over the long term.

d)            Maximum rate which the firm should require on any projects it undertakes.

e)            Rate the firm should expect to pay on its next bond issue.

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