Pinder Ltd has a weighted average cost of capital of 20% p.a. and is currently assessing two
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Question:
Pinder Ltd has a weighted average cost of capital of 20% p.a. and is currently assessing two new projects for investment. You are an analyst and have estimated that an investment in Project A is expected to return 5% p.a. and Project B is expected to return 22% p.a. You then estimate the required rate of return given the risk profile of each of the two projects as follows:
Required:
Return from project A 7% p.a.
Return from project B 25% p.a.
Related Book For
Intermediate Financial Management
ISBN: 9780357516669
14th Edition
Authors: Eugene F Brigham, Phillip R Daves
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