QUESTION 2 1 points Save Answer Bloom and Co. has no debt or preferred stock it
ID: 2798931 • Letter: Q
Question
QUESTION 2 1 points Save Answer Bloom and Co. has no debt or preferred stock it uses only equity capital, and has two equally-sized divisions. Division X's cost ofcapital is 10.0% Division Y's cost is 14.0% and the corporate composite) WACC is 12.0%. All of Division X's projects are equally risky, as are all of Division Y's projects. However, the projects of Division X are less risky than those of Division Y. Which of the following projects should the firm accept? 0 a A Division Y project with a 12% return. b.A Division Y project with an 1 1 % return. c. A Division X project with a 9% return. Od. A Division Y project with a 13% return. O e. A Division X project with an 1 1 % return.Explanation / Answer
Option e
the above is answer based on data given.
as X has higher return that its cost of 10.0%