An all-equity firm is considering the following projects: Project W X Y Z Beta IRR .54 .91 1.09 1.83 The T-bill rate is 5.1 percent, and the expected return on the market is 12.1 percent. a. Which projects have a higher/lower expected return than the firm's 12.1 percent cost of capital? Project W has a expected return, and Project Z has a 10.1% 10.6 14.1 17.1 expected return, Project X has a expected return. expected return, Project Y has a

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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An all-equity firm is considering the following projects:
Project
W
X
Y
Z
Beta
.54
.91
1.09
1.83
IRR
Project W has a
expected return, and Project Z has a
10.1%
10.6
14.1
17.1
The T-bill rate is 5.1 percent, and the expected return on the market is 12.1 percent.
a. Which projects have a higher/lower expected return than the firm's 12.1 percent cost of capital?
expected return, Project X has a
expected return.
expected return, Project Y has a
Transcribed Image Text:An all-equity firm is considering the following projects: Project W X Y Z Beta .54 .91 1.09 1.83 IRR Project W has a expected return, and Project Z has a 10.1% 10.6 14.1 17.1 The T-bill rate is 5.1 percent, and the expected return on the market is 12.1 percent. a. Which projects have a higher/lower expected return than the firm's 12.1 percent cost of capital? expected return, Project X has a expected return. expected return, Project Y has a
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