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Which of the following statements is FALSE? i) Microsoft has various divisions with different levels...

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Finance

Which of the following statements is FALSE?

i) Microsoft has various divisions with different levels of risk. The financial manager should use Microsofts WACC to evaluate a project in the Xbox division.

ii) A stock can have high volatility but low systematic risk.

iii) A high WACC means that the firm has a low cost of borrowing capital from various lenders.

iv) The firms WACC can be used as a discount rate to evaluate scale expansion projects, which are projects similar to what the firm has been doing.
  • A.

    i, iii

  • B.

    iii

  • C.

    i

  • D.

    ii, iii, iv

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