Langston Labs Has an Overall (Composite)WACC of 10%,which Reflects the Cost

question 26

Multiple Choice

Langston Labs has an overall (composite) WACC of 10%,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 8%,average-risk projects at 10%,and high-risk projects at 12%.The company is considering the following projects:
​
Which set of projects would maximize shareholder wealth?

• A)A and B.
• B)A, B, and C.
• C)A, B, and D.
• D)A, B, C, and D.
• E)A, B, C, D, and E.

---

Definitions:

Elasticity of Demand

A gauge for understanding how price changes influence the consumer demand for a particular good.

Constant Elasticity

A condition where the elasticity of a function, such as demand or supply, remains unchanged over a range of prices or quantities.

Reduce Smoking

The act of decreasing the frequency or amount of tobacco consumption.

Elasticity of Demand

A measure of how much the quantity demanded of a good responds to a change in the price of that good, indicating consumer sensitivity to price changes.