Use the Information for the Question(s)below

question 88

Multiple Choice

Use the information for the question(s) below.
Suppose that in the coming year,you expect Exxon-Mobil stock to have a volatility of 42% and a beta of 0.9,and Merck's stock to have a volatility of 24% and a beta of 1.1.The risk-free interest rate is 4% and the market's expected return is 12%.
-The cost of capital for a project with the same beta as Exxon Mobil's stock is closest to:

• A)11.6%.
• B)11.2%.
• C)12.8%.
• D)7.6%.

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Definitions:

Meso Ether

An ether that is part of a molecule having chiral centers but is overall achiral due to a plane of symmetry.

Enantiomeric Ethers

Ethers that are mirror images of each other but cannot be superimposed, typically having asymmetric centers that lead to chiral properties.

Methoxycyclohexane

An organic compound consisting of a cyclohexane ring with a methoxy group (-OCH3) attached, used as a solvent or intermediate in organic synthesis.

Mercury(II) Acetate

A chemical compound used as a reagent in organic synthesis, particularly in reactions involving alkenes and alkynes.