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6. Intel is exploring a joint venture with Ford to develop computer chips to use in automobiles. Although Intel has traditionally used a cost of
6. Intel is exploring a joint venture with Ford to develop computer chips to use in automobiles. Although Intel has traditionally used a cost of equity based on its beta of 1.50 and a cost of capital based on its debt ratio of 5%, it is examining whether it should use a different approach for this project. It has collected the follow- ing information. Refer to Chapter 8 Problem 6. Assume a riskless rate of 7%, a market risk premium of 5.5%, and a tax rate of 40%. The beta for that Intel should use to analyze this project is 1.5. This statement is: True False Refer to Chapter 8 Problem 6. Assume a riskless rate of 7%, a market risk premium of 5.5%, and a tax rate of 40%. The cost of capital for this project should be 11.64%. This statement is: True False
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