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

question 6

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

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Definitions:

Grade Equivalent

A measure indicating the school grade level of students to whom a test taker's performance is most similar.

Achievement Test

A type of ability test that measures what one has learned. Types of achievement tests include survey battery tests, diagnostic tests, and readiness tests.

Percentiles

A measure that indicates the value below which a given percentage of observations in a group of observations falls.

Stanines

Derived from the term “standard nines,” this is a standardized score frequently used in schools. Often used with achievement tests, stanines have a mean of 5 and a standard deviation of 2, and range from 1 to 9.