Milgrove Inc.'s overall WACC is 11%.It has an opportunity to accept a project that involves nearly riskless cash flows, but will earn only 7%.This project will require a significant portion of the firm's capital.If Milgrove accepts this project,
A) the value of the company will fall because its WACC will fall.
B) the value of the company will fall because its average rate of return on investments will fall.
C) the value of the company will rise because its WACC will fall.
D) both its average rate of return and its WACC should fall.
Correct Answer:
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