Question: Wagner 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
Wagner 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?
| Project A is of average risk and has a return of 9%. | |
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| Project B is of below-average risk and has a return of 8.5%. |
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| Project C is of above-average risk and has a return of 11%. |
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| None of the projects should be accepted. |
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