A company is considering a project with a beta of 0.5 while the company’s beta is 2.0. How should the company adjust its WACC to reflect the riskiness of the project? g

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asked Nov 15, 2021 76.7k views

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Randomwalker · Answer 1 · 2021-11-20T02:53:22+0000

Answer: decrease

Step-by-step explanation:

The weighted average cost of capital is a vital calculation that is used in finance to know whether the return on an investment will meet or exceed exceed a project or an asset.

If a company is considering a project with a beta of 0.5 while the company’s beta is 2.0, to reflect the riskiness of the project, the WACC will be reduced.

A company is considering a project with a beta of 0.5 while the company’s beta is 2.0. How should the company adjust its WACC to reflect the riskiness of the project? g

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