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Consider the following figure. If firm A were to use the divisional WACC it would Rate of Return Division 1 WACC WACC 130 110 Project

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Consider the following figure. If firm A were to use the divisional WACC it would Rate of Return Division 1 WACC WACC 130 110 Project 100 90 Project Composite WACC FA 70 Division L'S WACC 0 Rick o be making the wrong decisions on acceptance or rejection of both projects reject both Project Land Project H O accept Project Land reject Project o accept Project H and reject Project accept both Project and Project

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