The net present value (NPV) estimates of the company's projects are influenced by the weighted average cost of capital (WACC) estimate. This makes the WACC estimate very important.
Due to the fact that this cost can change at any time as a result of multiple factors, the estimation of the WACC is an ongoing process.
The required rate of return on equity investments with similar risk is influenced by the general level of stock prices. A company, on the other hand, does not have any control over the stock market. All market participants collectively determine stock market prices.
Because Congress sets tax rates, a company has no control over them or how they affect the cost of debt.
Every business can only control its capital structure, or the ratio of debt to equity, in its operations.
Learn more about WACC here:
https://brainly.com/question/25566972
#SPJ4
