Suppose two all equity-financed firms firm a and firm b are


Suppose two all equity-financed firms, Firm A and Firm B, are considering the same new project that has a beta of 0.90. The project has an IRR of 11.7%. Firm A has a beta of 0.7 and Firm B has a beta of 1.1. The risk-free rate is 5% and the expected market risk premium is 7%. Should neither, one (if so, which), or both firms accept the project? Clearly explain

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Financial Management: Suppose two all equity-financed firms firm a and firm b are
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