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    Question

    why is wacc important to an organization and what impact does wacc have on capital budgeting and structure?

    a few seconds ago 1 Answer

    Best Answer

    Lower WACC = Lower Risk = Higher Enterprise Value WACC is important for a variety of reasons: 1) Greater range of projects the firm can take on, because with a lower WACC, more projects will have a positive NPV 2) Greater Firm Value, and therefore, Greater Stock Price, because you discount cash flows by a smaller number Here, lots of good (and free) additional info from my grad school professor's website: http://pages.stern.nyu.edu/~adamodar/
    a few seconds ago

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