Question $19$

Tedjo should assign a project beta that is based on the average of Tedjo and the pure play formis betax.

The expected project revenues may be less cyclical than those of the pure play firm.

Tedjo may use less debt in its operations than does the pure play firm.

The pure play firm has more experience in the new area than Tedjo does.

The project may incur flotation costs so a higher beta is warranted to offset the additional cost.