5. Mirror Industries has an overall WACC of 10%, which reflects the cost of capital for its average asset. It assets vary widely in risk, and the company evaluates low risk projects with a WACC of 89, average-risk projects at 10%, and high-risk projects at 12%. The company is considering the following projects, which set of projects would maximize shareholder wealth? Project Risk Average High High Low Expected Return 12% 15% 11% 69 Low a. b. c. d. e. A, B, C, D, and E. A, B, C, and D. A, B, and D. A, B, and E. A, B, and c. 6. Which of the following statements is CORRECT? a. The payback method is generally regarded by academics as being the best single method for evaluating capital budgeting projects. b. The net present value method (NPV) is generally regarded by academics as being the best single method for evaluating capital budgeting projects. C. The internal rate of return method (IRR) is generally regarded by academics as being the best single method for evaluating capital budgeting projects. d. The modified internal rate of return method (MIRR) is generally regarded by academics as being the best single method for evaluating capital budgeting projects. e. The discounted payback method is generally regarded by academics as being the best single method for evaluating capital budgeting projects. 7. Joe's Hardware has the following data. Tfit follows the residual dividend model, what is its forecasted dividend payout ratio, i.e., Dividends/Net income? Capital budget $11,500 % Debt 4096 Net income (NI) $12.500 a. 35.39% b. 47.046 c. 38.98 d. 30.1896 e. 44.8096 If a firm adheres strictly to the residual dividend model, the issuance of new common stock would suggest that ai the dividend payout ratio has remained constant b. the dollar amount of capital investments had increased the dividend payout ratio is increasing. d. the dividend payout ratio is decreasing e dividends will be paid during the year