Which is a sensible number to use as weighted average cost of capital (WACC) for a company in the S&P 500?
A)1%
B)5%
C)10%
D)18%
E)22%

Question

Quizplus · Accepted Answer

WACC increased substantially due to the financial meltdown, however 10% is a reasonable number to use. All the other choices are too high or too low.
Key Takeaway: Adjust up for companies that have liquidity problems or high cost of borrowing.

Which Is a Sensible Number to Use as Weighted Average