Kingston Inc. has four business units. Capital budgeting decisions are made at the head office using the firm's overall WACC. After an internal review of operations, the firm concludes that each business unit has different risks. Which of the following is also likely to be true?

A. Higher earning divisions will be less risky than the lower earning divisions.

B. The differences in risk among the divisions has no impact on the capital budgeting process.

C. The highest divisional cost of capital will approximately equal the firm's overall cost of capital.

D. The divisions are being rewarded for decreasing their risk.

E. Its low earning division tends to be ignored in capital allocation even though it tends to maintain lower levels of risk