2) 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 of the below-average risk and had a return of 8.5%

b) Project A, which is of average risk and has a return of 9%

c) Project C, which is of above-average risk and has a return of 11%.

d) None of the projects

e) All of the projects (A,B, C)

3) To calculate the WACC we use the:

a) market rates and values

b) book rates and values (accounting book values)

4) Which of the following can be written off against a corporations taxes?

a) common stock dividends

b) interest payments on debt

c) preferred stock dividends