Starbucks wants to use the subjective approach to evaluate a new project. They are considering expanding their stores and renting office space to small business owners. They will have a separate reception area and online scheduling for those that want to use the office space. Starbucks has a WACC of $12\%.$ What would be the WACC for this new project?

Category

High risk

Moderate risk

Low risk

Mandatory

Examples

New products

Cost savings, Expansion of existing products

Replacement of existing equipment

Safety equipment

Adjustment

Factor

$6\%$

$(4)$

na