Capital budgeting with leverage
Question: In Chapter 18, Berk and DeMarzo (2020) illustrate the differences between the three main methods that corporations use for capital budgeting with leverage and within imperfect markets, which are: (a) The Weighted Average Cost of Capital (WACC) method. Compare and contrast the three different methods that we use for capital budgeting and highlight each method’s strengths and weaknesses.
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