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Which of the following procedures is the best way to account for projects with higher relative risk? It is better to always use the average
Which of the following procedures is the best way to account for projects with higher relative risk?
| It is better to always use the average WACC as the discount rate for any project. | ||
| Ignore risk because project risk cannot be measured accurately. | ||
| Adjust the WACC discount rate downward if the project is judged to have above-average risk. | ||
| Adjust the WACC discount rate upward if the project is judged to have above-average risk. | ||
| BOTH A. and B. are correct. |
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