What is the appropriate cost of capital for a project

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1. The risk-free rate is 4%. The expected rate of return on the stock market is 12%. What is the appropriate cost of capital for a project that has a beta of -3? Does this make economic sense?

2. The risk-free rate is 4%. The expected rate of return on the stock market is 7%. A corporation intends to issue publicly traded bonds that promise a rate of return of 6% and offer an expected rate of return of 5%. What is the implicit beta of the bonds?

Reference no: EM131235383

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