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WACC valuation method

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Reference no: EM133227513

Question 1. Which of the following is not a step in the WACC valuation method?

A. Determine the unlevered free cash flow of the investment.

B. Compute the weighted average cost of capital.

C. Compute the value of the investment, including the tax benefit of leverage, by discounting the free cash flow of the investment using the WACC.

D. Separately value the unlevered cash flows and interest tax shields.

Question 2. Which of the following projects is likely to have risk similar to the average risk of the firm?

a. Google plans to purchase real estate to expand its headquarters.

b. A U.S. defense firm plans to build a new commercial jet.

c. Target Corporation decides to expand the number of stores it has in the southeastern United States.

d. Apple Inc. is working on an Apple electric car project.

Reference no: EM133227513

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