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The managers of a firm financed entirely with common stock are evaluating two distinct projects. The first project has a large amount of unsystematic risk

The managers of a firm financed entirely with common stock are evaluating two distinct projects. The first project has a large amount of unsystematic risk and a small amount of systematic risk. The second project has a small amount of unsystematic risk and a large amount of systematic risk. Which project, if taken, is more likely to increase the firms cost of capital?

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