Question 1: What is Weighted Average Cost of Capital (WACC)? Identify TWO (2) factors that affect the WACC of a company.
Using debt can help reduce the agency problem that may arise between the management of a company and its shareholders. Explain.
Question 2: Explain the effects of the following on the company's weighted average cost of capital:
i) Floatation cost
ii) Reduction in corporate tax