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Melbo Group Ltd is considering an expansion project into another region within South Africa. Before determining the Projects cash flows, Melbo is assessing what discount
Melbo Group Ltd is considering an expansion project into another region within South Africa. Before determining the Projects cash flows, Melbo is assessing what discount rate he should use. Based on an assessment of the risk the company needs to use its current WACC plus 2% as the discount rate. Other information provided is as follows: Debt:Equity Ratio of Melbos Co. 50% Prevailing Corporate Tax Rate 28% Equity return expectations 17% Cost of Borrowings for Melbos Co. 11.5% Group of answer choices 14.65% 13.65% 16.09%
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