Author Question: Langston Labs has an overall (composite) WACC of 11%, which reflects the cost of capital for its ... (Read 64 times)

shivanipalawai@gmail.com · **on:** Aug 7, 2023

Langston Labs has an overall (composite) WACC of 11%, which reflects the cost of capital for its average asset. Its assets vary widely in risk, and Langston evaluates low-risk projects with a WACC of 9%, average projects at 11%, and high-risk projects at 13%. The company is considering the following projects:


Project	Risk	Expected Return
A	High	16%
B	Average	13
C	High	14
D	Low	10
E	Low	8

Which set of projects would maximize shareholder wealth?

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A, B, and C

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A, B, and D

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A, B, C, and D

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A, B, C, D, and E

fowlerhop@rocketmail.com · **Reply #1 on:** Aug 7, 2023

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