Cost of capital as the discount rate for all projects

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Reference no: EM131569559

Which of these may occur if a firm uses its overall cost of capital as the discount rate for all projects?

I. Profitable low-risk projects may be incorrectly rejected.

II. Only projects with risks similar to the current firm will be accepted.

III. Too many high-risk projects may be accepted.

IV. Only low-risk projects will be accepted.

II only

II and IV only

I and III only

I and IV only

I, II, and III only

Reference no: EM131569559

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