Question

A project under consideration has an internal rate of return of 16% and a beta of...

A project under consideration has an internal rate of return of 16% and a beta of 0.5. The risk-free rate is 6%, and the expected rate of return on the market portfolio is 16%.


a. What is the required rate of return on the project? (Do not round intermediate calculations. Enter your answer as a whole percent.)

b. Should the project be accepted?

c. What is the required rate of return on the project if its beta is 1.50? (Do not round intermediate calculations. Enter your answer as a whole percent.)

d. If project's beta is 1.50, should the project be accepted?

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Answer #1

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