1. Suppose the stock of the Quatram Company, a publisher of college textbooks, has a beta () of 1.3. The firm is 100-percent equity financed; that is, it has no debt. Quatram is considering a number of capital-budgeting projects that will double its size. Because these new projects are similar to the firm’s existing ones, the average beta on the new projects is assumed to be equal to Quatram’s existing beta. The risk-free rate is 7 percent. What is the appropriate discount rate for these new projects, assuming a market-risk premium of 9.5 percent?