For a Multi-Product fiRm, If a Project's Beta Is Different

question 7

Multiple Choice

For a multi-product firm, if a project's beta is different from that of the overall firm, then the:

• A)CAPM can no longer be used.
• B)project should be discounted using the overall firm's beta.
• C)project should be discounted at a rate commensurate with its own beta.
• D)project should be discounted at the market rate.
• E)project should be discounted at the T-bill rate.

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