What is the appropriate discount rate

Reference no: EM133251546

Question - Lebron Inc. plans to invest in seaweed farms. A CFO of Lebron Inc. reports that the initial outlay of this investment opportunity is $10,000,000 and that the company can raise funds externally. To be specific, the firm can borrow $5,000,000 by issuing bonds at 5%, and the remaining $5,000,000 can be funded by issuing shares. The expected return on the common stocks is 15%. In addition, the opportunity cost of capital is 17%. What is the appropriate discount rate to use for this investment valuation?

Reference no: EM133251546

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