Explain when firms should discount projects using the cost of equity. When should they

use the WACC instead? When should they use neither?

Every firm needs to raise money in its business cycle- It has the option of doing that either by Equity or Debt. Sometimes when a company decides to raise money through both of them , they are needed to find out the average of the cost in both equity and debt respectively. For that, they use WACC

When they can raise money through equity only (IPO, Shareholders ) they take the Cost of equity.

Explain when firms should discount projects using the cost of equity. When should they

use the WACC instead? When should they use neither?