Question: You are evaluating the following four projects: Project Beta Projected (or Expected) Return A 1.80 19.5% B 1.20 14.0% C 0.80 11.5% D 0.50 7.0%

You are evaluating the following four projects:

Project	Beta	Projected (or Expected) Return
A	1.80	19.5%
B	1.20	14.0%
C	0.80	11.5%
D	0.50	7.0%

Your companys current practice is to apply its WACC of 12% as a single hurdle rate to all projects. Under your companys 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%. (Hint: Measure the RADRs using the CAPM.) Group of answer choices At least two of the projects are incorrectly accepted.

A B C D

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