The US Risk-Free Rate Is Currently 3

question 27

Multiple Choice

The U.S. risk-free rate is currently 3%. The expected U.S. market return is 10%. Solso, Inc. is considering a project that has a beta of 1.2. What is the cost of dollar-denominated equity?

• A) 8.4%
• B) 11.4%
• C) 10%
• D) None of the above

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Definitions:

Foreign Official

An individual who holds a position of authority or office in a government or international agency outside of one's own country.

Absolutism

A theory of ethics which requires that individuals defer to a set of rules to guide them in the ethical decision-making process. Whether an action is moral depends on whether it conforms to the given set of ethical rules.

Inflexible

Inflexible describes a lack or absence of flexibility; not open to change or adaptation.

Business Ethics

A field of study that examines moral principles and problems that arise in a business environment.