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What an appropriate discount rate for the project is

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Problem 1: Backyard Tavern has a beta of 1.5 and a cost of equity of 13.2 percent. The risk-free rate of return is 4.2 percent. Backyard is considering a project with a beta of 1.7 and a project life of eight years. An appropriate discount rate for the project is:

A) 10.80 percent
B) 12.16 percent
C) 14.40 percent
D) 15.84 percent
E) 18.00 percent.

Reference no: EM132755783

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