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eBook Gamma Biosciences is financed entirely with equity. Its beta is 0.9, and its price-earnings...

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eBook Gamma Biosciences is financed entirely with equity. Its beta is 0.9, and its price-earnings ratio is 16. The current risk-free rate is 8 percent, and the expected return on the market is 13 percent. Round your answers to one decimal place. a. What rate of return should the company require on projects of average risk? % b. If a new project has a beta of 1.8, what rate of return should the company require? %

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