Question 3 (12 points) Assume company ABC's stock has a market value of 8 with corresponding equity costs of 18%. ABC has also riskless debt outstanding with market value of 4 and debt costs of 6%. The firm has a project which is expected to yield 17%, but which is 40% more risky than existing assets. Assume that the CAPM holds. Is the project profitable? Explain your answer. Question 3 (12 points) Assume company ABC's stock has a market value of 8 with corresponding equity costs of 18%. ABC has also riskless debt outstanding with market value of 4 and debt costs of 6%. The firm has a project which is expected to yield 17%, but which is 40% more risky than existing assets. Assume that the CAPM holds. Is the project profitable? Explain your