15. General Motors is considering undertaking an investment project in a new electric car called...
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15. General Motors is considering undertaking an investment project in a new electric car called Priw (stands for "Prius-wannabe"). The cost of the initial investment is $8 million in year zero. The project then yields the following expected cash flows (in millions): Year 1: $0 Year 2: $2.2 Year 3: $7.9 Year 4: $7 Suppose that the risk-free rate is equal to 5%, and that the expected return on the market portfolio is equal to 12%. If this project's beta is equal to 1.4, what is the firm's shareholder required rate of return? 15.8% 12.8% I do not want to answer this question 14.8% 13.8% 11.8%
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