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The firm's cost of equity capital is 13%, the market value of the firm's equity is 6million ID, the firm's cost of debt capital is
The firm's cost of equity capital is 13%, the market value of the firm's equity is 6million ID, the firm's cost of debt capital is 8%, and the market value of debt is 2million. ID The firm is considering new investment with an expected rate of return of 15%. This project is 25%riskier than the firm's average operations. The riskless rate of return is 4%; the variance of the market return is .07. Is the project profitable
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