Based on your understanding of the concept of cost of capital, which of the following statements are valid? Choose all that apply.
a. Companies have free cash flow that is available for distribution, and investors expect to earn a certain required rate of return if it is invested.
b. The company's weighted average cost of capital (WACC) incorporates the required rates of return that investors expect as a compensation for the risk.
c. The required rate of return for long-term debt capital funding is incorporated seperately in project analysis, because it is not included in the weighted average cost of capital (WACC).
d. The weighted average cost of capital (WACC) is considered the overall rate expected to generate
