ABC Corp. has a AAA credit rating while XYZ Corp. has an A credit rating. Can XYZ's WACC ever be lower than ABC'S?
Question
Solution 1
Yes, it is possible for XYZ Corp. with an A credit rating to have a lower Weighted Average Cost of Capital (WACC) than ABC Corp. with a AAA credit rating. Here's why:
- Credit Rating and Cost of Debt: Generally, a higher credit rating (like AAA) indicates lower risk, which means the company can bo Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study prob
Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
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