Walker, Inc., is an all-equity firm. The cost of the companys equity is currently 11.9 percent and

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Walker, Inc., is an all-equity firm. The cost of the company’s equity is currently 11.9 percent and the risk-free rate is 3.5 percent. The company is currently considering a project that will cost $11.4 million and last 6 years. The company uses straight-line depreciation. The project will generate revenues minus expenses each year in the amount of $3.8 million. If the company has a tax rate of 23 percent, should it accept the project?

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Corporate Finance

ISBN: 978-1259918940

12th edition

Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan

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