You are considering the capital budgeting project j with a life expectancy of 20 years. - 4838

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You are considering the capital budgeting project j with a life expectancy of 20 years. The short-term government rate (rf) is 5%, the beta of firms that produce products similar to project j is 1.2, and the return on the market (rm) the last 20 years has been 10%. What is the cost of capital for this project? 

a. 9.00% 

b. 10.00% 

c. 11.00% 

d. cannot tell 

 

Solution Description

You are considering the capital budgeting project j with a life e