Question
Plz Use excel !!! and show formula An all-equity firm is considering two projects. Project A has a beta of 0.5 and the IRR if
Plz Use excel !!! and show formula
An all-equity firm is considering two projects. Project A has a beta of 0.5 and the IRR if 12%. For project B the beta is 1.5 and the IRR is 15%. Assume that the T-bill is 3%, the market return is expected to be 13%, and the beta of the company is 1.1. a. Which project(s) should be accepted/rejected? b. If you use the WACC of the company has the hurdle rate, which project(s) should be accepted/rejected? c. Which projects would be incorrectly accepted or rejected if the firms overall cost of capital was used as the hurdle rate? d. Show graphically how the projects are placed relatively to the Security Market Line (SML).
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