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Toni is working for Gallo Winery and is evaluating an investment project. She decided to use the expected return of Gallo as the discount rate.

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Toni is working for Gallo Winery and is evaluating an investment project. She decided to use the expected return of Gallo as the discount rate. She estimated Gallo to have a market beta of 1.25. If the risk-free rate is 5% and the market risk premium is 896, what is the discount rate Toni should use? O 1396 O 1496 0 1596 O 1696

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