Delta Foods Is an Unlevered Firm That Is Equally as Risky

question 14

Multiple Choice

Delta Foods is an unlevered firm that is equally as risky as the market.U.S.Treasury bills are yielding 2.8 percent and the market risk premium is 8.1 percent.What discount rate should be assigned to a project that has the same risks as Delta Foods?

• A)10.9%
• B)8.1%
• C)2.8%
• D)5.3%
• E)13.7%

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