If the discount rate is based solely on the riskiness of the project's anticipated cash flows,we would refer to it as the

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The all-equity rate is based solely on the riskiness of the anticipated cash flows and does not take into account any financing costs. The weighted average cost of capital (B) incorporates both the cost of equity and the cost of debt, and the debt cost of capital (C) only considers the cost of debt. The all-equity beta (D) is a measure of the systematic risk of an all-equity financed firm.

If the Discount Rate Is Based Solely on the Riskiness