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Company A is a large firm with several divisions. If the firm uses the same WACC for all capital budgeting decisions, each division will tend

Company A is a large firm with several divisions. If the firm uses the same WACC for all capital budgeting decisions, each division will tend to: (Indicate your multiple choice answer and explain your answer)

A.

get less funding if it's riskier than another division.

B.

prefer riskier projects.

C.

lower their risk over time based on which projects the company accepts.

D.

have the same likelihood of receiving funding as other divisions.

E.

receive more funding by staying away from riskier projects.

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