Question:

What happens to WACC as you increase leverage?

Answer hidden.

Answer:

The more leverage you put on initially will bring WACC down, until you cross the point of optimal capital structure when it will start to increase WACC because interests rates will be higher and the company’s beta will be higher because the amount of debt makes it riskier.

Question:

What happens to WACC as you increase leverage?

Answer:

Other

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