Question
An all-equity firm is considering the projects shown as follows. The T-bill rate is 4 percent and the market risk premium is 8 percent. If
An all-equity firm is considering the projects shown as follows. The T-bill rate is 4 percent and the market risk premium is 8 percent. If the firm uses its current WACC of 13 percent to evaluate these projects, which project(s) will be incorrectly accepted?
| Project | Expected Return | Beta |
| A | 9.0% | .7 |
| B | 20.0% | 1.1 |
| C | 15.0% | 1.5 |
| D | 18.0% | 1.9 |
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TExES Business And Finance Secrets Study Guide
Authors: TExES Exam Secrets Test Prep Team
1st Edition
1516706862, 978-1516706860
