You are evaluating the following four projects: 

Project	Beta	Projected (or Expected) Return
A	1.80	18.0%
B	1.20	16.8%
C	1.00	11.5%
D	0.50	9.5%

Your company's current practice is to apply its WACC of 12% as a single hurdle rate to all projects.  Under your company's current practice, which project(s) of the four projects above would be incorrectly accepted? Currently, the 3-month Treasury bill rate is 3%, and the market risk premium is 10%. 

Answer rating: 100% (QA)

To determine which projects would be incorrectly accepted under your companys current practice of ap... View the full answer