FINANCE-Backyard Tavern has a beta of 1.5 and a cost of equity of 13.2 percent

QUESTION

Backyard Tavern has a beta of 1.5 and a cost of equity of 13.2 percent. The risk-free rate of return is 4.2 percent. Backyard is considering a project with a beta of 1.7 and a project life of eight years. An appropriate discount rate for the project is:10.80 percent.12.16 percent.14.40 percent.15.84 percent.18.00 percent.

ANSWER:

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