What is the appropriate cost of capital for a project

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1. In a perfect world and in the absence of externalities, should you take only the projects with the highest NPV?

2. Write down the CAPM formula. Which are economy-wide inputs, and which are project specific inputs?

3. The risk-free rate is 6%. The expected rate of return on the stock market is 8%. What is the appropriate cost of capital for a project that has a beta of 2?

Reference no: EM131235352

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