Company a has a beta of 15 and a cost of capital of 25, Ask an Expert

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Company "A" has a beta of 1.5 and a cost of capital of 25%. Company "B" has a beta of 0.8 and a cost of capital of 15%.

When evaluated at a rate of 15%, the project shows an NPV of +$5 million, and when evaluated at a rate of 25%, the project shows an NPV of -$2 million.

Should either company accept the project and if so under what conditions?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91263372

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