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A company has two separate business units (80% manufacturing and 20% tech). You have properly calculated the manufacturing WACC = 9.50%, and the tech WACC

A company has two separate business units (80% manufacturing and 20% tech). You have properly calculated the manufacturing WACC = 9.50%, and the tech WACC = 13.60%. Therefore, the companys overall WACC = 10.32%. What might be two different problems if the companys managers use the overall WACC
when evaluating projects.

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