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QUESTION
Duval Inc. uses only equity capital and it has 2 equally sized divisions. Division A cost of capital is 10.0%, Division B cost 14.0% and the...
Duval Inc. uses only equity capital and it has 2 equally sized divisions. Division A cost of capital is 10.0%, Division B cost 14.0% and the corporate(composite) WACC is 12.0%. All of division A's project are equally risky, as are all of of Division B's project. However, the project of Division A are less risky than those of Division B. Which of the following projects should the firm accept?
