For a Multi-Product Firm,if a Project's Beta Is Different from That

question 52

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.