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A company s directors are considering an investment in a major project. The following criteria for the investment are under consideration: The project will be

A companys directors are considering an investment in a major project. The
following criteria for the investment are under consideration:
The project will be funded using debt that will have a 10% post-tax rate of
interest.
The projects internal rate of return is 9%. The company has a standard hurdle rate
of 12%.
The projects estimated beta coefficient indicates that the required rate of return is
14%.
The companys historical weighted average cost of capital is 16%.
What is the lowest rate of return that the company can accept in order to maintain
shareholders wealth?
10%
12%
14%
16%

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