Merlin Labs has an overall (composite) WACC of 10%, which reflects the cost of capital for its average asset. Its assets vary widely in risk, and Merlin 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 15%

B Average 12

C High 11

D Low 9

E Low 6

Which set of projects would maximize shareholder wealth?

a. A and B.

b. A, B, and C.

c. A, C, and D.

d. A, B, and D.