A company has two divisions, A and B. Division A is riskier than B and thus the WACC for A is 10% while the appropriate WACC for B is 7%. The CFO of the company has selected to use a WACC of 8.5% for all new project proposals whether they originate in Division A or Division B. This will tend to lead to too many of Division A's proposals being accepted and too many of Division B's proposals being rejected.

True

False