Firmwide vs. Project-Specific WACCS An all-equity firm is considering the projects shown below. The T-bill rate is 4 percent and the market risk premium is 7 percent. If the firm uses its current WACC of 12 percent to evaluate these projects, which project(s), if any, will be incorrectly rejected? (LG6) 

Transcribed Image Text:

PROJECT EXPECTED RETURN BETA ABCD 8.0% 0.5 19.0 1.2 C 13.0 1.4 D 17.0 1.6