An all-equity firm is considering the projects shown below. The T-bill rate is 3 percent and the market risk premium is 6 percent. If the firm uses its current WACC of 12 percent to evaluate these projects, which project(s) will be incorrectly rejected?
A) Project A
B) Projects B and C
C) Project D
D) Project B

Question

An all-equity firm is considering the projects shown below. The T-bill rate is 3 percent and the market risk premium is 6 percent. If the firm uses its current WACC of 12 percent to evaluate these projects, which project(s) will be incorrectly rejected? 
A) Project A 
B) Projects B and C 
C) Project D 
D) Project B

Quizplus · Accepted Answer

The Answer of An all-equity firm is considering the projects shown below. The T-bill rate is 3 percent and the market risk premium is 6 percent. If the firm uses its current WACC of 12 percent to evaluate these projects, which project(s) will be incorrectly rejected? 
A) Project A 
B) Projects B and C 
C) Project D 
D) Project B

An All-Equity Firm Is Considering the Projects Shown Below