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The answer is D. Why? 11. The Alibaba Group wants to realise a $10 million invesunu projcu anu man n will $4 million of equity
The answer is D. Why?
11. The Alibaba Group wants to realise a $10 million invesunu projcu anu man n will $4 million of equity and $6 million of debt. The levered beta of this investment equals 1.5. The risk-free rate is 2%, the expected market return is 4% and the marginal tax rate is 40%. What is the equity cost of capital of this investment project? A) 7% B) 6% C) 4% D) 5%Step by Step Solution
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