What is assessment of the statement

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Question 1: You have just returned to your job after completing your MBA, generously funded by the CEO. A few days later, your CEO requests you to evaluate the following news release he will issue to analysts. "For years we have thought about our business strategy, without worrying about financing. Times have changed and we need to think about our cost of capital. From now on we should only use debt to finance our next major projects. The lower cost of debt financing than equity financing implies that all of these projects only need to beat a lower hurdle rate." What is your assessment of this statement?

Reference no: EM132929871

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