Multiple Choice
LaPango Inc.estimates that its average-risk projects have a WACC of 10%,its below-average risk projects have a WACC of 8%,and its above-average risk projects have a WACC of 12%.Which of the following projects (A,B,and C) should the company accept?
A) Project B,which is of below-average risk and has a return of 8.5%.
B) Project C,which is of above-average risk and has a return of 11%.
C) Project A,which is of average risk and has a return of 9%.
D) None of the projects should be accepted.
E) All of the projects should be accepted.
Correct Answer:
Verified
Correct Answer:
Verified
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