Anna K, a Russian firm specializing in railway safety systems, borrows money at 8% and...
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Finance
Anna K, a Russian firm specializing in railway safety systems, borrows money at 8% and its stock is priced by the market to provide a 20% return. The companys debt-equity ratio is currently 3. What discount rate should the company use to evaluate new projects so as to at least cover its weighted average cost of capital?
a. 8%
b. 9.5%
c. 11%
d. 14%
e. 20%
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