Basic definition: What is meant by WACC? What are the components of WACC? PLUS: Go to the UOP Library. Find a peer-reviewed article that answers the following questions. Identify and analyze the author’s thesis and conclusion. Do you agree with the author? Why or why not? Be sure to cite your reference. When is WACC an appropriate discount rate when doing capital budgeting? What are the considerations when an entity is looking at opening a new location or adding a product line? How should risk be factored into the analysis?
Response: Titman describes Weighed average cost of capital as, "A composite of the individual costs of financing incurred by each capital source. A firm’s weighted cost of capital is a function of (1) the individual costs of capital, (2) the capital structure mix,