Suppose a firm uses a corporate-wide WACC in a multi-divisional firm. Which of the following statement(s) is (are) correct:
1. The use of a corporate-wide cost of capital would allocate too much capital to the riskier divisions.
2. Multi-divisional companies should use a common corporate-wide hurdle rate.
3. The use of a corporate-wide cost of capital would allocate too much capital to the less risky divisions.
4. The use of a corporate-wide cost of capital could lead to the rejection of some projects in the less risky divisions.