assignment entrepreneurs manager
October 18, 2020
Accounting Fraud at WorldCom Case Questions
October 18, 2020

Jackson Inc. uses only equity capital, and it has 2 equally-sized divisions. Division A’s cost of capital is 10.0%, Division B’s cost is 14.0%, and…

Jackson Inc. uses only equity capital, and it has 2 equally-sized divisions. Division A’s cost of capital is 10.0%, Division B’s cost is 14.0%, and the composite WACC is 12.0%. All of Division A’s projects have the same risk, as do all of Division B’s projects. However, the projects in Division A have less risk than those in Division B. Which of the following projects should Jackson accept?

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