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Dunbar Inc has an overall (composite) WACC of 10%, which reflects the cost of capital for its average asset. Its assets vary widely in risk,
Dunbar Inc has an overall (composite) WACC of 10%, which reflects the cost of capital for its average asset. Its assets vary widely in risk, and Dunbar evaluates low-risk projects with a WACC of 8%, average projects at 10%, and high-risk projects at 12%. The company is considering the following projects: Project Risk Expected Return A High 11% B Average 12% High 15% D Low 9% E Low 6% Which projects should the firm accept to maximize shareholder wealth? B, C and D A, B, and C A, B, C, D, and E A, B, C, and D
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