An All-Equity Firm Is Considering the Projects Shown as Follows

Multiple Choice

An all-equity firm is considering the projects shown as follows. The T-bill rate is 3 percent and the market risk premium is 6 percent. If the firm uses its current WACC of 12 percent to evaluate these projects, which project(s) will be incorrectly rejected?
$$\begin{array} { c c r } \text { Project } & \text { Expected Return } & \text { Beta } \\\text { A } & 10.0 \% & 0.9 \\\text { B } & 17.0 \% & 1.1 \\\text { C } & 12.5 \% & 1.4 \\\text { D } & 15.0 \% & 2.2\end{array}$$

A) Project A
B) Projects B and C
C) Project D
D) Project B