21. A. U.S. Treasury bills B. large company stocks C. small company stocks D. long-term government bonds E. inflation For the period from 1926 to 2014, which onc of the following had the highest volatility? 22. A firm that uses its weighted average cost of capital as the required return for all of its projects will: A. maintain a constant value for its shareholders. B. increase the risk level of the firm over time. C. only reject those projects that should be rejected. D. find that its cost of capital declines over time. E. accept only the projects that add value to the firm's sharebolders. 23. Investment projects that plot above the security market line would be considered to have: A. a positive NPV B. a negative NPV C. a zero NPV. D. an excessively high discount rate. E. a return that is too low for the level of risk. structure weights on book values rather than market values because the market values tend to fluctuate widely A. True 24. When computing the weighted average cost of capital (WACC), it is generally better to base the capital B. False 25. We can estimate a firm's cost of debt by observing the: A. yield-to-maturity on the firm's outstanding debt. B. coupon rate on the firm's outstanding debt. C. yield-to-maturity on newly-issued debt of other firms without regard to risk. D. risk-free rate of interest and adding a risk premium to the coupon rate of existing debt. E. firm's bank borrowing rate on short-term loans