📈 CFA Exam Prep

The weighted average cost of capital (WACC) is used in valuation as:

A The growth rate
B The discount rate for future cash flows in a discounted cash flow (DCF) model
C The dividend rate
D The tax rate

✓ Correct Answer: Option B

WACC serves as the discount rate in DCF analysis, reflecting the blended cost of all capital sources.

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