A firm is considering a project that is virtually risk-free. The company has a beta of 1.3 and a debt- equity ratio of .4. The appropriate discount rate to use in analyzing this project is:
A) The firm's latest WACC.
B) An adjusted WACC based on a beta of 1.0.
C) The cost of equity capital.
D) The Treasury bill rate.
E) Zero.
Correct Answer:
Verified
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