Problem 11-25 Firmwide vs. Project-Specific WACCs (LG11-6)

An all-equity firm is considering the projects shown below. The T-bill rate is 5 percent and the market risk premium is 7 percent.

PROJECT		EXPECTED RETURN				BETA
A			10	%		0.7
B			21			1.4
C			15			1.6
D			19			1.8

Calculate the project-specific benchmarks for each project. (Round your answers to 2 decimal places.)

Project A	%
Project B	%
Project C	%
Project D	%

If the firm uses its current WACC of 14 percent to evaluate these projects, which project, will be incorrectly rejected?

	Project A
	Project B
	Project C
	Project D