Consider an all equity company (the company only issue common stock). The beta of the company's...
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Consider an all equity company (the company only issue common stock). The beta of the company's common stock is 1.10. The risk free rate is 5 percent and the market risk premium is 12 percent. The company is currently evaluating a project with an expected return of 19.5 percent and a beta of 1.30. Should the company accept the project? Why or why not? Consider an all equity company (the company only issue common stock). The beta of the company's common stock is 1.10. The risk free rate is 5 percent and the market risk premium is 12 percent. The company is currently evaluating a project with an expected return of 19.5 percent and a beta of 1.30. Should the company accept the project? Why or why not?
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