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WACC and Hurdle Rates

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What is the relationship between hurdle rate and Weighted Average Cost of Capital (WACC)?

Which type of risk is more difficult to minimize: systematic or unsystematic? Why?

Given the choice, being a small business owner, having experienced success in the local market, and wishing to expand company operations on a greater scale, what type of external financing would you use first and why?

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Which type of risk is more difficult to minimize: systematic or unsystematic? Why?

Unsystematic risk or diversifiable risk is caused by random events as lawsuits, strikes, successful and unsuccessful marketing programs, winning or losing a major contract, and other events that are unique to a particular firm. Since these events are random, their effects on a portfolio can be eliminated by diversification that is bad events in one firm will be off-set by good events in ...

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