Solved: Rate of return should dmt require on project of average risk, Finance Basics

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Rate of return should dmt require on project of average risk

Question: The DMT Company is financed entirely with equity. DMT has a beta of 1.20 and the current risk-free rate of 9.5%. If the expected market return (Km)is 14%, what rate of return should DMT require on a project of average risk? [ke=krf + (km-krf)(B)]

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