Explain what is the reasonable cost of capital for average

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Explain What is the reasonable cost of capital for average, high and low risk projects

Suppose a firm estimates its WACC to be 10 %. Should the WACC be used to evaluate all of its potential projects, even if they vary in risk? If not, what might be "reasonable" costs of capital for average-, high-, and low-risk projects?

Reference no: EM1315032

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