Question: T4 Project Beta Expected Return in % 1 0.65 10 2 0.85 12 3 1.00 13 4 1.25 14 5 1.50 15 RF = 3%;

T4

Project Beta Expected Return in %

1 0.65 10

2 0.85 12

3 1.00 13

4 1.25 14

5 1.50 15

RF = 3%; The Equity Risk Premium is 7% and the WACC is 10%.

a. List projects that you would accept.

b. Which projects have been rejected usinf the cost of capital as a hurdle rate ?

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