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Title: Pilgrim's WACC is 12%. It has one opportunity to invest in a high risk project with an expected ... Post by: papahomer on May 31, 2017 Pilgrim's WACC is 12%. It has one opportunity to invest in a high risk project with an expected rate of return of 25%. It has another opportunity to lease a building to a government agency. The expected rate of return on the lease is 10%.
A) Pilgrim should definitely accept the high risk project and reject the leasing arrangement. B) Ideally, Pilgrim would discount the cash flows from each project at a rate appropriate to its risk. C) Pilgrim should definitely accept both projects. D) Pilgrim should finance the lease with all debt and the high risk project with all equity. Title: Re: Pilgrim's WACC is 12%. It has one opportunity to invest in a high risk project with an expected ... Post by: vanrhee on May 31, 2017 Content hidden
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