Swizer industries has two separate divisions. division x has less risk so its projects are assigned a discount rate equal to the firm's wacc minus .75 percent. division y has more risk and its projects are assigned a rate equal to the firm's wacc plus 1 percent. the company has a debt-equity ratio of .48 and a tax rate of 34 percent. the cost of equity is 15.4 percent and the aftertax cost of debt is 5.4 percent. presently, each division is considering a new project. division y's project provides a return of 12.9percent while division x's project is expected to earn 11.5 percent. which project(s), if any, should the company accept?
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Swizer industries has two separate divisions. division x has less risk so its projects are assigned...
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