Suppose That a Foreign Project Has a Beta of 1

question 31

Multiple Choice

Suppose that a foreign project has a beta of 1.12,the risk-free return is 8% and the required return on the market is estimated at 17%.Then cost of capital for the project is

• A)24.2%
• B)19.3%
• C)18.1%
• D)15.4%

---

Definitions:

Consumer Surplus

The variance between the aggregate sum consumers are prepared and able to spend on a good or service versus what they truly pay.

Consumer Surplus

The divergence between the full amount consumers intend and are able to allocate for a good or service, and the amount they really pay.

Total Utility

The complete fulfillment derived from the consumption of a specific amount of products or services.

Consumer Surplus

The gap between the total price consumers are willing and able to shell out for a good or service and the amount they really pay.