FINANCE 205-Explain how WACC is used in capital budgeting analysis
Explain how WACC is used in capital budgeting analysis and explainthe problem of incorrect rejections and acceptances.2.Explain the problem of multiple rates of returns under the IRRmethod? Under what conditions will you have multiple IRRs?3.From a company’s perspective, what are the advantages anddisadvantages of issuing debt, preferred stock and common stock.Explain. 4. Discuss how sunk costs, opportunity costs and side effects should betreated in capital budgeting analysis. Give examples. 5.Explain briefly: “Financial leverage is not important becauseshareholders can use personal borrowing to create their own homemade leverage”ORExplain briefly explain the Modiglianni-Miller propositions on whetherdebt affects the WACC?Please answer only on of the above two questions.
