= = KRF + (KM.KRE) b 8% + (15%-8%) b, = 8% + (7%)b, Here, risk-adjusted discount rate appropriate for the i th project k = KRF = risk-free rate of interest; Fay uses 8 percent based on U.S. Treasury bond yields. KM = expected return on the market." Fay uses an historical figure of 15 percent. b = beta coefficient of the ith project; these values must be subjectively estimated. The World Bank analysts estimated the beta coefficients for each project as follows: Beta Coefficient 2.50 3.25 3.00 2.75 3.00 Project A B Oil Project Alaska Oil's overall beta (with the market) is 1.143. Given this information, calculate the risk-adjusted discount rates for Alaska Oil, the oil exploration project, and Projects B and D. For Projects A and C, the values are 25.5 and 29 percent respectively. Note that Alaska Oil's own bet was calculated without regard to the effects of any of these projects