Silo Mills is an all-equity financed firm that has a beta of 1.18 and a cost of equity of 12.2 percent. The risk-free rate of return is 2.9 percent. The firm is currently considering a project that has a beta of 1.03 and a project life of six years. What discount rate should be assigned to this project? O 11.56% O 11.20% O 11.02% O 10.56%

Essentials Of Investments
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Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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Silo Mills is an all-equity financed firm that has a beta of 1.18 and a cost of equity of 12.2 percent. The risk-free rate of
return is 2.9 percent. The firm is currently considering a project that has a beta of 1.03 and a project life of six years.
What discount rate should be assigned to this project?
O 11.56%
O 11.20%
O 11.02%
10.56%
A Moving to another question will save this response.
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Transcribed Image Text:Silo Mills is an all-equity financed firm that has a beta of 1.18 and a cost of equity of 12.2 percent. The risk-free rate of return is 2.9 percent. The firm is currently considering a project that has a beta of 1.03 and a project life of six years. What discount rate should be assigned to this project? O 11.56% O 11.20% O 11.02% 10.56% A Moving to another question will save this response. «< Question 25 of 30
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