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 4 percent and the market risk premium is 9 percent. If the firm uses its current WACC of 14 percent to evaluate these projects, which project(s) will be incorrectly rejected? $$\begin{array} { | c | c | c | } \hline \text { Project } & \text { Expected Return } & \text { Beta } \\\hline \mathrm { A } & 7.0 \% & 0.25 \\\hline \mathrm { B } & 17.0 \% & 1.3 \\\hline \mathrm { C } & 12.0 \% & 1.6 \\\hline \mathrm { D } & 10.0 \% & 2.1 \\\hline\end{array}$$

A) Project A
B) Project B
C) Project C
D) Project D