Angelo State University Operations And Supply Chain Management Assignment Help - finance
Question - Bruceton Hotels is an all-equity firm with 60,000 shares of stock outstanding. The stock has a beta of
1.27 and a standard deviation of 13.8 percent. The market risk premium is 9.1 percent and the risk-
free rate of return is 4.2 percent. The company is considering a project that it considers riskier than its
current operations so it wants to apply an adjustment of 1 percent to the project's discount rate. W hat
should the firm set as the required rate of return for the project?
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