Question
An all-equity firm is considering the projects shows below. The T-bill rate is 4 percent and the market risk premium is 7 percent. If the
An all-equity firm is considering the projects shows below. The T-bill rate is 4 percent and the market risk premium is 7 percent. If the firm uses its current WACC of 12 percent to evaluate these projects, which project(s), if any, will be incorrectly rejected?
Project Expected Return Beta
A 8.0% 0.2
B 19.0 1.4
C 13.0 0.8
D 17.0 1.3
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Principles of Managerial Finance
Authors: Chad J. Zutter, Scott B. Smart
15th edition
013447631X, 134476315, 9780134478197 , 978-0134476315
