18. Company Kappa is a local Spanish power production company that has no debt, and a single shareholder that cannot diversify her portfolio. The company is studying the possibility of expanding internationally by investing in a new power plant that would be installed in South Africa and which would be financed only with equity. The current required return on equity of the company is 10% and this is the discount rate used by the firm to discount the expected cash flows of the new project. a) The new project is of lower risk than the current assets of the company and therefore the company is overvaluing the new project. b) The new project is of higher risk than the current assets of the company and therefore the company is overvaluing the new project, c) The new project is of higher risk than the current assets of the company and therefore the company is undervaluing the new project. d) None of the above