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:

Autonomy

The right or condition of self-government; in ethics, it often pertains to an individual's capacity to make informed, uncoerced decisions.

Sense of Trust

A feeling of confidence and security in the predictability and reliability of a person, situation, or environment.

Spread of Infection

The process by which infectious agents, such as bacteria or viruses, are transmitted from one individual or surface to another, potentially causing disease.

Auscultate

The act of listening to the internal sounds of the body, typically with a stethoscope.