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7. An all-equity firm is considering the projects shown below. The T-bill rate is 4 percent and the market risk premium is 8 percent. lf

7. An all-equity firm is considering the projects shown below. The T-bill rate is 4 percent and the market risk premium is 8 percent. lf the firm uses its current WACC of 13 percent to evaluate these projects, which project(s) will be incorrectly accepted? Project Expected return Beta A B C D 9.0% 20.0% 15.0% 18.0% 0.7 1.1 1.5 1.9 A. Project A B. Project C C. Project D D. Projects C and D

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