Determining the rate of return

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Reference no: EM1366514

The DMT Corporation is financed entirely with equity. DMT has a beta of 1.20 and current risk-free rate of 9.5 percent. If the expected market return is 14 percent, what rate of return should DMT require on a project of average risk? [ke=krf + (km-krf)(B)]

The following choices are one of the answers:
a. 14.9%
b. 15.4%
c. 14.0%
d. none of the above

Reference no: EM1366514

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