Delta Foods Is an Unlevered Firm That Is Equally as Risky

question 24

Multiple Choice

Delta Foods is an unlevered firm that is equally as risky as the market.U.S.Treasury bills are yielding 2.4 percent,and the market rate of return is 8.1 percent.What discount rate should be assigned to a project that has the same risks as Delta Foods?

• A)8.1%
• B)9.6%
• C)10.%
• D)5.7%
• E)13.7%

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Definitions:

Enzyme

Biological molecules that significantly speed up the rate of virtually all of the chemical reactions within cells.

Organic Groups

Radicals or moieties consisting of carbon atoms bonded in various configurations, distinguishing organic from inorganic compounds.

Protein

Large, complex molecules that play many critical roles in the body, including in the structure, function, and regulation of tissues and organs.

Complementary Strand

Refers to the sequence of nucleotides in DNA or RNA that is precise pairing opposite to another sequence, forming a double-stranded structure.