Amazon is present in the IT services sector (Amazon Web Services or AWS) and the grocery sector (Whole Foods or WF). Let's say that the CFO of Amazon is using the WACC of Amazon (WACC_A) to value projects associated with AWS and WF. Assuming that the correct discount rates for projects associated with AWS and WF verify r_WF < WACC_A < r_AWS, using a single WACC leads to...

Underinvest in AWS, overinvest in WF

Overinvest in AWS, underinvest in WF