Which may occur if a firm uses its overall cost of capital

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Question: Which of these may occur if a firm uses its overall cost of capital as the discount rate for all projects?

I. Profitable low-risk projects may be incorrectly rejected.

II. Only projects with risks similar to the current firm will be accepted.

III. Too many high-risk projects may be accepted.

IV. Only low-risk projects will be accepted.

Reference no: EM131996291

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