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there's part A,B and C Look at the 4 projects you want to evaluate. the IRR of each project to get a rate of return.
there's part A,B and C
Look at the 4 projects you want to evaluate. the IRR of each project to get a rate of return. In order the results are 8.9%(W),9.6%(X).12.0%(Y), and 15.1% (Z). The betas are listed in order, 59(W),86(X). 114(Y), and 1.46(Z). The Risk-free rate is 4.1%, and the expected return on the market is 11.1%. a. Which projects have a higher/lower expected return than the firm's 11.1S weighted average cost of capital (WACC)? b. Which projects should be accepted using the SML rule? c. Which projects will be incorrectly accepted/rejected or correctly accepted/rejected if the firm's weighted cost of capital were used as a hurdle rate Step by Step Solution
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