Why is WACC considered the appropriate discount rate for calculating the present value of a company's future cash flows?

The Weighted Average Cost of Capital (WACC) is considered the appropriate discount rate for calculating the present value of a company's future cash flows because it represents the cost of capital that a company incurs from both debt and equity sources. By using WACC as the discount rate, it takes into account the company's overall cost of financing, which reflects the risk associated with the company's operations and the returns expected by both debt and equity investors. This provides a more accurate valuation of the company's future cash flows.