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PUS 5. A company is considering 3 projects: a low risk project A, an average risk project B, and a high risk project C. The
PUS 5. A company is considering 3 projects: a low risk project A, an average risk project B, and a high risk project C. The company has an average WACC of 11%, applies a 2% discount to its low risk projects, and a 2% premium to its high risk projects. The company should accept O A) Project A which has an expected return of 8% O B) Project B which has an expected return of 10% O C) Project C which has an expected return of 12% O D) None of the projects O E) All of the projects They Question 6 1 pts 6. A company that repeatedly uses the average WACC to make investment decisions when faced with projects of varying risk will, over the long run, O A) become more risky B) become less risky O C) not experience any change in its risk O D) experience unpredictable changes in its risk O E) lower its average WACC
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