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Laramie Labs Uses a Risk-Adjustment When Evaluating Projects of Different

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Laramie Labs uses a risk-adjustment when evaluating projects of different risk. Its overall (composite) WACC is 10%, which reflects the cost of capital for its average asset. Its assets vary widely in risk, and Laramie evaluates low-risk projects with a risk-adjusted project cost of capital 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?
Laramie Labs uses a risk-adjustment when evaluating projects of different risk. Its overall (composite)  WACC is 10%, which reflects the cost of capital for its average asset. Its assets vary widely in risk, and Laramie evaluates low-risk projects with a risk-adjusted project cost of capital 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.


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