Which of the Following Statements Is Correct

question 25

Multiple Choice

Which of the following statements is correct?

• A) If a new project is riskier than the firm's existing projects, then it should expect to be "charged" a higher cost of capital than the firm's overall WACC.
• B) If a new project is riskier than the firm's existing projects, then it should expect to be "charged" a lower cost of capital than the firm's overall WACC.
• C) The project's risk and the cost of capital to which it is compared are independent.
• D) None of the options are correct.

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Definitions:

THC

Tetrahydrocannabinol, the principal psychoactive constituent of cannabis, responsible for its mind-altering effects.

Active Ingredient

The component of a drug or substance that is biologically active and responsible for its effects on the body.

Marijuana

A psychoactive drug from the Cannabis plant used for medical or recreational purposes, known for its effects on mood and perception.

Glaucoma

A group of eye conditions that damage the optic nerve, often associated with increased pressure within the eye.