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The market outlet has a beta of 1.38 and a cost of equity of 14.945 percent. The risk free rate of return is 4.25 percent.

The market outlet has a beta of 1.38 and a cost of equity of 14.945 percent. The risk free rate of return is 4.25 percent. What discount rate should this firm assign to a new project that has a beta or 1?

a. 13.54

b. 13.72

c. 13.94

d. 14.14

e. 14.36

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