If a Company Uses Its WACC as the Discount Rate

Multiple Choice

If a company uses its WACC as the discount rate for all of the projects it undertakes then the company will tend to:

A) accept all positive net present value projects.
B) increase the average risk level of the company over time.
C) reject all high-risk projects.
D) reject all negative net present value projects.
E) favor low-risk projects over high-risk projects.