a. CAPM can no longer be used.
b. project should be discounted using the overall firm's beta.
c. project should be discounted at a rate commensurate with its own beta.
d. project should be discounted at the market rate.
e. project should be discounted at the T-bill rate.
8. The use of WACC to select investments is acceptable when the:
a. correlation of all new projects are equal.
b. NPV is positive when discounted by the WACC.
c. risk of the projects are equal to the risk of the firm.
d. firm is well diversified and the unsystematic risk is negligible.
e. None of the above.
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