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Why is the weighted average cost of capital a more correct rate for discounting free cash flow th...

Why is the weighted average cost of capital a more correct rate for discounting free cash flow than the cost of equity?

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For discounting we need to consider the cost of funds. This is the opportunity cost of the funds used. The weighted average cost of capital is the right indicator since it considers the cost of debt as well as the taxes. Taking the cost of equity alone does not consider the cost of funds. The WACC represents the correct cost of funds used.

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