Nalcoa Corp

question 97

Multiple Choice

Nalcoa Corp.is financing a project that is in the same industry as its current portfolio of projects.If Nalcoa has a beta of 1.5 and the expected market risk premium is 8% while the risk-free rate is 5% then what is the weighted average cost of capital for Nalcoa if it is,and plans to continue to be an all equity financed firm?

• A) 9.5%
• B) 13.0%
• C) 17.0%
• D) there is not enough information to calculate the WACC

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Definitions:

Project Life Cycle

The stages through which a project goes from initiation to completion, typically including initiation, planning, execution, monitoring/control, and closure.

Scheduling Tool

Software or methodologies used for planning and organizing work and tasks within a given timeframe, ensuring efficiency and time management.

Business Model

Describes the rationale of how an organization creates, delivers, and captures value in economic, social, cultural, or other contexts.

Extinct

A term describing a species or condition that no longer exists anywhere on Earth.