Wilsons is reviewing a project with an internal rate of


Wilson’s is reviewing a project with an internal rate of return of 13.09 percent and a beta of 1.42. The market risk premium is 8.1 percent, the tax rate is 35 percent, and the risk-free rate is 2.9 percent. The firm’s WACC is 12.68 percent. Will the project be accepted if the WACC is used as the discount rate for the project? Should the project be accepted according to the CAPM, and why or why not?

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Financial Management: Wilsons is reviewing a project with an internal rate of
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