Question 5 (Mandatory) (2 points) An all-equity firm is considering the following projects. Projects Beta Expected Return (%) Gamma 0.78 15% Mega 1.36 13% Maxi 1.40 16% Assume the T-bill rate is 5% and the market risk premium is 11%. The firm's cost of capital is 15%. Which projects would be incorrectly rejected if the firm's overall cost of capital is used as a hurdle rate? ) Maxi B) Mega C) Gamma and Maxi OD) None of them E) Gamma Previous Page Next Page Page 5 of 19