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Which one of the following will tend to occur if a firm uses its WACC as the required rate of return for all its proposed projects?


Which one of the following will tend to occur if a firm uses its WACC as the required rate of return for all
its proposed projects?












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A.

the company will either correctly accept or correctly reject each proposed project





B.

the lower risk projects will automatically be accepted





C.

the higher risk projects will automatically be rejected





D.

the firm's WACC will tend to increase over time, all else held constant






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Finance-8094975.doc

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Which one of the following will tend to occur if a firm uses its WACC as the
required rate of return for all its proposed projects?
Answers:C) The higher risk projects will automatically be...

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