Venerus had a decision to make.

He wondered whether he should move forward with proposing this new methodology of adding business-specific risk scores to the WA CC to the board. Venerus was brought onto a newly created Corporate Analysis & P lanning department. Board members are aware that the traditional WACC was not wo rking due to the events that were occurring internationally. The proposal by Venerus should be nothing short of a great idea. The adjusted WA CC would be pessimistic for AES, but it should be what they needed. AES was bein g too optimistic in their cash flows. AES assumed that the subsidiary companies were going to maintain 12% dividends to the parent company, and never considered potential disasters they were to face in developing countries. The new conserva tive approach in the WACC would keep their cash flows more realistic.