Finite-life projects may have higher or lower WACC than perpetuities.
The article discusses how traditional methods of calculating a firm's tax shield and weighted average cost of capital may not be accurate for projects with a limited lifespan. The study shows that the WACC can be either higher or lower than expected, depending on factors like project duration, return rates, and debt structure. This research helps managers understand the potential biases in evaluating projects with finite useful lives.