Problem 11-26 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 9 percent.

PROJECT		EXPECTED RETURN				BETA
A			10	%		0.5
B			22			1.2
C			17			1.4
D			21			1.6

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 15 percent to evaluate these projects, which project(s), will be incorrectly accepted?

	Project A
	Project B
	Project C
	Project D