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You look at the rate of returns, and the betas of different capital investment options. To determine which should be pursued, you will look at

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You look at the rate of returns, and the betas of different capital investment options. To determine which should be pursued, you will look at Internal Rate of Return, the Capital Asset Pricing Model (Security Market Line), and the Weighted Average Cost of Capltal. The expected return on the market is 12.1%, and the risk-free rate is 5.1% Project Z: return =171%, beta =1.83 Project X: return =10.6%, beta =.91 Project W; return =10.1%, beta =.54 Project Y : return =14.1%, beta =1.09 o. Which projects should be occepted using the CAPM(SML) rule? b. Which projects hove o higherflower expected return than the firm's 12.1% weighted overoge cost of copital (WACC)? c. Which projects will be incorrectly nccepted/rejected er correctly nccepted/rejected if the firm's weighted avernge cost of capital was only used as the decinion rule

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