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MBA,MCS,M.phil
Devry University
Jan-2008 - Jan-2011
MBA,MCS,M.Phil
Devry University
Feb-2000 - Jan-2004
Regional Manager
Abercrombie & Fitch.
Mar-2005 - Nov-2010
Regional Manager
Abercrombie & Fitch.
Jan-2005 - Jan-2008
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Help preaty Please An all-equity firm is considering the projects shown below. The T-bill rate is 6 percent and the market risk premium is 9 percent. |
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| PROJECT | Â | EXPECTED RETURN | Â | BETA | Â | ||
| A | Â | Â | 11 | % | Â | 0.5 | Â |
| B | Â | Â | 23 | Â | Â | 1.2 | Â |
| C | Â | Â | 18 | Â | Â | 1.4 | Â |
| D | Â | Â | 22 | Â | Â | 1.6 | Â |
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|
Calculate the project-specific benchmarks for each project. (Round your answers to 2 decimal places.) |
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| Â | Â |
| Project A | % |
| Project B | % |
| Project C | % |
| Project D | % |
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|
If the firm uses its current WACC of 16 percent to evaluate these projects, which project(s), will be incorrectly accepted? |
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|
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