Firmwide vs. Project-Specific WACCs An all-equity firm is considering the projects shown as follows. The T-bill rate is 4 percent and the market risk premium is 7 percent. If the firm uses its current WACC of 12 percent to evaluate these projects, which project(s), if any, will be incorrectly accepted?

Project	Expected Return	Beta
A	8.0%	0.5
B	19.0	1.2
C	13.0	1.4
D	17.0	1.6

Using the firms WACC of 12 percent as the IRR benchmark, projects B, C, and D would be accepted. Using equation 11-2, the project-specific benchmarks for each project should be: