Question

An all-equity firm is considering the following projects: Project Beta IRR X .87 9.7% Y 1.13...

An all-equity firm is considering the following projects:

Project

Beta

IRR

X

.87

9.7%

Y

1.13

11.9%

The risk-free rate is 4.2 %, and the expected return on the market is 11.2%.

B. Using CAPM/SML, which projects should be accepted?

Question 10 options:

12

Project Y

12

Project X
1.

Reject
2.

Accept
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