Quick-Link has debt outstanding whose market value is €200 million, and equity outstanding with amarket value of €800 million.Quick-Link is in the 34% tax bracket, and its debt is considered riskfree.Merrill Lynch has provided an equity beta of 1.50.Given a risk free rate of 3% and an expectedmarket return of 12%, calculate the discount for a scale enhancing project in the hypothetical casethat Quick-Link is all equity financed.
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