Question 17 14 15 Not yet answered The Costa Brava Corporation has each year similar numbers of low-risk, average-risk, and high-risk projects to consider for its annual capital budgeting. The WACC of Costa is curently estimated at 12%, which is the cost of capital used to discount projects of average risk. Costa has just appointed a new CFO who argues that even though company's projects have different risks, the cost of capital for each project should be the same because the company obtains its capital from the same financing sources. Under this CFO, the following are possible scenarios that could happen over time. Marked out of 3.50 Flag Question Scenario. The company will take on too many low-risk projects and reject too many high-risk projects. Scenario Ml. The company will take on too many high-risk projects and reject too many low-risk projects Scenario M. Things will generally even out over time, therefore the risk of the firm should remain constant over time. If the company follows the new CFO's advice, what is likely to happen over time? Select one: a. Scenarios I and Ill are most likely to occur. b. Scenario I is most likely to occur. c. Scenario illis most likely to occur. d. Scenarios Il and Ill are most likely to occur. e. Scenario Il is most likely to occur. Question 18 Not yet You are a superannuation fund manager holding a portfolio of five stocks each with a corresponding beta measuring equity risk. Marvel Vahe in