Your companys overall WACC is 10%, which reflects the cost of capital for its average asset. Its assets vary widely in risk, and your company evaluates low-risk projects with a WACC of 8%, average-risk projects at 12.5%, and high-risk projects at 14%. If your company is considering the following projects, which set of projects would maximize shareholder wealth?

Project Risk Expected Return

A High 15%

B Average 13%

C Average 11%

D Low 9%

E Low 7%

	A.	C, D, & E
	B.	A &B
	C.	A, B, & D
	D.	Covariance and variance
	E.	B, C, & D