Question
I've tried to get the answer from the other questions on Chegg that have this, but they are slightly different and I keep getting 11.02
I've tried to get the answer from the other questions on Chegg that have this, but they are slightly different and I keep getting 11.02 or 13.70, none of the right answers.
Decker's is an all-equity financed chain of retail furniture stores. Furniture Fashions, a furniture maker, is the primary supplier to Decker's. Decker's has a beta of 1.54 as compared to Furniture Fashion's beta of 1.37. The risk-free rate of return is 2.6 percent and the market risk premium is 7.9 percent. What discount rate should Decker's use if it considers a project that involves the manufacturing of furniture?
14.54 percent
12.92 percent
13.50 percent
13.42 percent
14.08 percent
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