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Pls send the answers as soonest as possible pls. thanks OURSTIONITRLARKC) Shim's WACC is 10% but it adjusts for risk by adding 2% to the
Pls send the answers as soonest as possible pls. thanks
OURSTIONITRLARKC) Shim's WACC is 10% but it adjusts for risk by adding 2% to the WACC for high-risk projects and subtracting 2% for low-risk projects. Required i. Choose projects should shim accept if it faces no capital constraints. [8 marks] ii. If Shim can only invest a total of 13 million, choose projects should it accept and compute the dollar size of the capital budget. [6 marks] ii. Suppose Shim can raise additional funds beyond the 13 miltion, but each new increment (or partial increment) of 5 million of new capital will cause the WACC to increase by 1%. Assuming that Shim uses the same methods of risk adjustment, choose their projects should it now accept and compute the dollar size of its capital budget. [7 marks iv. Explain briefly any two project risk adjustment (incorporation) methodsStep by Step Solution
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