An all-equity firm is considering the projects shown as follows.
The T-bill rate is 4 percent and the market risk premium is 8 percent. If the firm uses its current WACC of 13 percent to evaluate these projects, which project(s) will be incorrectly accepted?
A)Project A
B)Project C
C)Project D
D)Projects C and D

Question

An all-equity firm is considering the projects shown as follows. 
The T-bill rate is 4 percent and the market risk premium is 8 percent. If the firm uses its current WACC of 13 percent to evaluate these projects, which project(s) will be incorrectly accepted?
A)Project A 
B)Project C 
C)Project D 
D)Projects C and D

Quizplus · Accepted Answer

The Answer of An all-equity firm is considering the projects shown as follows. 
The T-bill rate is 4 percent and the market risk premium is 8 percent. If the firm uses its current WACC of 13 percent to evaluate these projects, which project(s) will be incorrectly accepted?
A)Project A 
B)Project C 
C)Project D 
D)Projects C and D

An All-Equity Firm Is Considering the Projects Shown as Follows