Thunder Bay Entertainment Inc.has two separate divisions: DVD rental and sporting goods.The beta of the entire company is 1.25.The beta of the DVD rentals division is 0.8 and the beta of the sporting goods division is 1.5.The risk-free rate is 4 percent and the market risk premium is 7.5 percent.Which of the following independent projects should the company undertake?
A) Projects I and II
B) Projects I and III
C) Projects II and IV
D) Projects III and IV
Correct Answer:
Verified
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