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QUESTION
A firm is considering a project that is virtually risk-free. The company has a beta of 1.3 and a debt-equity ratio of . The appropriate discount rate...
A firm is considering a project that is virtually risk-free. The company has a beta of 1.3 and a debt-equity ratio of .4. The appropriate discount rate to use in analyzing this project is:
Select one:
a. The firm’s latest WACC.b. An adjusted WACC based on a beta of 1.0.c. The U.S. Treasury bill rate.d. Zero.e. The cost of equity capital.