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Distinguish between beta(i.e market) risk, within-firm( i.e,corporate) risk, and stand-alone risk for a potential project. Of the three measures, which is theoretically the most relevant,
Distinguish between beta(i.e market) risk, within-firm( i.e,corporate) risk, and stand-alone risk for a potential project. Of the three measures, which is theoretically the most relevant, and why? Suppose a firm estimates its overall cost of capital for the coming year to be 10%. What might be reasonable costs of capital for average-risk, high-risk, and low-risk project?
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