Weatherall Enterprises has no debt or preferred stock-it is an all-equity firm-and has a beta of 2.0. The chief financial officer is evaluating a project with an expected return of 14%, before any risk adjustment. The risk-free rate is 5%, and the market risk premium is 4%. The project being evaluated is riskier than an average project, in terms of both its beta risk and its total risk Which of the following statements is CORRECT? a. Capital budgeting projects should be evaluated solely on the basis of their total risk. Thus, insufficient information has been provided to make the accept/reject decision. b. The accept/reject decision depends on the firm's risk-adjustment policy. If Weatherall's policy is to mcrease the required return on a riskier-than-average project to 3% over rS, then it should reject the project. C. The project should definitely be rejected because its expected return (before risk adjustment) is less than its required return. d. The project should definitely be accepted because its expected return (before any risk adjustments) is greater than its required tetum e. Riskier-than-average projects should have their expected retums increased to reflect their higher risk. Clearly, this would make the project acceptable regardless of the amount of the adjustment. Clioksave and Submit to aque and submit. Chick Save AII Ansuvers to tave all answers