WACC=WdKd(1T)+WeKe 1. A basic concept of finance is risk and return. With higher risk, investors demand a higher expected return. WACC is the cost of capital paid to the firm's investors to provide their returns. This does not alter the concept of risk and return. The green line (flat) at 10% is the firm WACC. Projects L (low risk) and H (high risk) are not of average risk. When analyzing these two projects should you use the firm WACC (green line) or Project risk adjusted WACCS (Brown line which is upward sloping)? Explain. Do you accept project L or project H