Question

Each of the following factors affects the weighted average cost of capital (WACC) equation. Which are factors that a firm cannot control? Check all that apply. The firm’s capital budgeting decision rules Tax rates The general level of stock prices The firm’s capital structure

Answer 1

-Tax rates

-The general level of stock prices

Step-by-step explanation:

The factors that a firm cannot control are the ones that it has no power to decide and they are determined by a third party. According to that, from the options given, the factors that the firm cannot control are tax rates because they are established by the government and the general level of stock prices because it is determined by the supply and demand in the market.

The other options are not right because the company can establish its process to evaluate investments and expenses and how to finance its assets with debt and equity.