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Clark Corporation uses the firm's WACC as the required return for some of its projects. For other projects, the firm uses a rate equal to
Clark Corporation uses the firm's WACC as the required return for some of its projects. For other projects, the firm uses a rate equal to WACC plus 1 percent, while another set of projects is assigned rates equal to WACC minus some amount. Which one of the following factors should be the key factor the firm uses to determine the amount of the adjustment it will make when determining an appropriate discount rate for the project? Risk level of project Current deb-to-equity ratio Firm beta Date for project commencement Division within the firm that will be assigned to manage the project
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