| This is a question in Schweser note book 4:
Q: Which of the following would most likely lead to an increase in a firm's capital investment in projects of average risk for the current period? A. An increase in the firm's expected growth rate b. An increase in the firm's expected marginal tax rate
The answer is B because it reduce WACC. What I don't understand is (according to the book) why an increase in expected growth rate will increase the cost of equity capital and the firm's WACC. Please help me! Thanks! [em06] | 
发表于 2008-9-16 07:53
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