Question: When evaluating projects that have risk levels different from those of the existing projects of a firm, the use of the firm's weighted average cost

When evaluating projects that have risk levels different from those of

the existing projects of a firm, the use of the firm's weighted

When evaluating projects that have risk levels different from those of the existing projects of a firm, the use of the firm's weighted average cost of capital (WACC) in project evaluation tends to INCORRECTLY accept low risk NPV>0 projects and reject high risk NPV0 projects. reject low risk NPV>0 projects and accept high risk NPV0 projects. Which of the following statements is/are correct about findings/observations regarding Efficient Market Hypothesis (EMH)? Stock prices adjust before most individual investors can respond to news announcements, consistent with the EMH. Professionally managed mutual funds outperform a market index, suggesting a violation of the semi-strong form EMH. Returns of small company stocks are much higher than large company stocks to be consistent with the semi-strong form EMH. Fluctuating and unpredictable stock price movements suggest irrational investor behaviors and hence are violations of weak form EMH

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