TaxiCorp is entirely financed with equity. Its risk premium is 14%. TaxiCorp calculates that a new project has a return of 16.5%. What other information is necessary to determine whether TaxiCorp should take the project? When should TaxiCorp accept the project?
You need to know the risk-free rate; TaxiCorp should accept the project if the risk-free rate is less than 2.5%
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