An all-equity firm is considering the following projects: Project ...
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Finance
An all-equity firm is considering the following projects:
Project
Beta
IRR
X
.87
9.7%
Y
1.13
11.9%
The risk-free rate is 4.2 %, and the expected return on the market is 11.2%. C. Which projects will be incorrectly accepted/rejected or correctly accepted/rejected if the firm's cost of capital were used as a hurdle rate?
Question 11 options:
1234
Project X
1234
Project Y
1.
Correctly Rejected
2.
Incorrectly Rejected
3.
Correctly Accepted
4.
Incorrectly Accepted
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