IKON Is Financed Entirely with Equity, and Its Beta Is

question 9

Multiple Choice

IKON is financed entirely with equity, and its beta is 1.31. If the current risk-free rate is 6.25% and the expected market return is 12.8%, what is IKON's required rate of return on a project of average risk?

• A) 8.58%
• B) 14.83%
• C) 17.65%
• D) 12.81%

---

Definitions:

Gate Theory

A theory that suggests the spinal cord contains a neurological "gate" that controls the transmission of pain signals to the brain.

Trichromatic Theory

A theory explaining how the human eye perceives colors through the response of three types of cones sensitive to blue, green, and red light.

Retinex Theory

suggests that color perception is not solely based on the wavelengths of light reaching the eye but also involves an active processing of visual information by the brain to maintain color constancy under different lighting conditions.

Cutaneous Senses

The sensory systems associated with the skin that detect touch, temperature, and pain.