Answer:
e. The value of a firm is maximized when the
Explanation:
The value of a firm is maximized when the weighted average cost of capital is minimized.
When the cost of capital or investment is lower, the profit or after tax value generated by the firm would be higher (lower finance cost, higher profit). This implies, the value of firm would be higher. Also, value of firm today is present value of all future after tax profit discounted by cost of capital. Lower the discount rate (WACC), higher would be the value of firm hence.
