Mcq - Choose the right answer.

fed stock Nelson Enterpri with an expected return of 21%, premium is risk and its total risk. Which of the following statements is corret es, an all-equity firm, has a beta of 2.0. Nelson's chief financial officer is evaluating a project The e lar fore any risk adjustment. The risk-free rate is 7%, and the market risk both its beta project being evaluated is riskier than Nelson's average project, in terms of icreased to reflect their er-than-average projects should have their expected returns reflect their e the project acceptable regardless of the amount of d return on a riskier-than-average project to 3% overs then it c. The project should definitely be accepted because its expected return (before any nisk the adjustaienearly, this would the adjustment The accepureject t decision depends on the firm's risk-adjustment policy. If Nelson's policy is to increase the require should reject the project. The project should definitely be rejected because its expected return (before risk adjustment) is less than its required return. adjustments) is greater than its required return. d