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Calculate the project-specific benchmarks for each project

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Reference no: EM132701523

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

Problem 1: Calculate the project-specific benchmarks for each project. (Round your answers to 2 decimal places.)

Problem 2: If the firm uses its current WACC of 14 percent to evaluate these projects, which project(s), will be incorrectly accepted?

Reference no: EM132701523

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