With rF = 4% and E(rM) = 12%, the cost of capital for a project with a

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With rF

= 4% and E(˜rM) = 12%, the cost of capital for a project with a beta of 3 is E(˜r) = rF

+ [E(˜rM) −

rF] . βi

= 4% + (12% − 4%) . 3 = 28%.

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Corporate Finance An Introduction

ISBN: 9780321277992

1st Edition

Authors: Ivo Welch

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Question Posted: Oct 25, 2024 08:01 AM

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With rF = 4% and E(rM) = 12%, the cost of capital for a project with a

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Corporate Finance An Introduction

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