Cole is working on a new project and has identified the following comparable firms (it's a...

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Cole is working on a new project and has identified the following comparable firms (it's a weird project): Beta of Equity D/E Ratio Beta of Debt 1.40 0.50 0.20 1.30 0.25 0.05 1.52 0.60 0.40 The market risk premium is 6% and the risk-free rate is 2%. What is the appropriate discount rate to use for your new project? Cabela's Pfizer Tesla Cole is working on a new project and has identified the following comparable firms (it's a weird project): Beta of Equity D/E Ratio Beta of Debt 1.40 0.50 0.20 1.30 0.25 0.05 1.52 0.60 0.40 The market risk premium is 6% and the risk-free rate is 2%. What is the appropriate discount rate to use for your new project? Cabela's Pfizer Tesla

Answer rating: 100% (QA)

To calculate the appropriate discount rate cost of equity we need to use the Capital Asset Pricing M... View the full answer