Suppose That a Foreign Project Has a Beta of 1

question 15

Multiple Choice

Suppose that a foreign project has a beta of 1.12,the risk-free return is 9.3% and the required return on the market is estimated at 18%.Then the cost of capital for the project is

• A)17.21%
• B)21.37%
• C)19.04%
• D)20.03%

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Definitions:

Halo Effect

A cognitive bias where one's overall impression of a person influences how we feel and think about their character.

Attracted

The state or condition of being drawn to or interested in something or someone, often in a romantic or sexual manner.

Proximity

The physical closeness or nearness of objects, individuals, or concepts, often influencing relationships, interactions, and perceptions.

Physical Attraction

The degree of appeal one individual feels physically towards another, influenced by physical features, symmetry, and other traits.