For an average-risk project, the opportunity cost of capital is the company’s WACC.
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2.3. Applying the Cost of Capital to Capital Budgeting and Security Valuation of capital for the project, product, or division as opposed to the cost of capital for the company overall. The cost of capital in these applications should reflect the riskiness of the future cash flows of the project, product, or division. <span>For an average-risk project, the opportunity cost of capital is the company’s WACC. If the systematic risk of the project is above or below average relative to the company’s current portfolio of projects, an upward or downward adjustment, respectively, is made to the c
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