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An all-equity firm is considering the projects shown below. The T-bill rate is 6 percent...

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Finance

An all-equity firm is considering the projects shown below. The T-bill rate is 6 percent and the market risk premium is 6 percent.

Project Expected Return Beta
A 11 % 0.8
B 21 % 1.5
C 15 % 1.7
D 19 % 1.9

Calculate the project-specific benchmarks for each project. (Round your answers to 2 decimal places.)

Project A %
Project B %
Project C %
Project D %

If the firm uses its current WACC of 14 percent to evaluate these projects, which project, will be incorrectly rejected?

  • Project A

  • Project B

  • Project C

  • Project D

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