$4$

$1$ point

Michel Inc uses only equity capital, and it has $2$ equally$-$sized divisions. Division A$\text{'}$s cost of capital is $10\mathrm{.}0\%,$ Division B$\text{'}$s cost is $14\mathrm{.}0\%,$ and the composite WACC is $12\mathrm{.}0\%.$ All of Division A$\text{'}$s projects have the same risk, as do all of Division B$\text{'}$s projects. However, the projects in Division A have less risk than those in Division B$.$ Which of the following projects should Michel accept?

A Division A project with a $9\%$ return.

A Division B project with an $11\%$ return.

A Division B project with a $13\%$ return.

A Division A project with an $11\%$ return.

A Division B project with a $12\%$ return.