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A firm that uses its WACC as a cutoff without consideration of project risk: Tends to become less risky over time. Tends to reject more
- A firm that uses its WACC as a cutoff without consideration of project risk:
- Tends to become less risky over time.
- Tends to reject more negative NPV projects over time.
- Likely will see its WACC rise over time.
- Will only accept projects where the IRR is equal to the WACC
- The type of risk that we can diversify away is ____________
- Unsystematic risk
- Systematic risk
- Nondiversifiable risk
d. Systemwide risk
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