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%.

---

Definitions:

Responsible

Having an obligation to do something, or having control over or care for someone, as part of one's job or role.

Creative

Possessing the ability or skill to create new and original ideas, products, or solutions.

Supportive

Providing assistance, encouragement, or comfort, often during times of need or stress.

Fear of the Unknown

An anxiety or apprehension felt towards something that is unfamiliar or unknown, often leading to avoidance behavior.