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Debbies Diner is considering expanding by building a new Diner in a distant city and considers the project to be riskier than her current operation.

Debbies Diner is considering expanding by building a new Diner in a distant city and considers the project to be riskier than her current operation. She estimates her diners existing beta to be 1.0, the market risk premium to be 10.00%, the risk-free rate to be 3.00%, and the beta for the new diner to be 1.40. Given this information, the discount rate she should use is closest to what value?

a.17.32%

b.21.16%

c.9.08%

d.13.60%

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