Wanda Brunner, CFA, is working on a capital project valuation and needs to determine the appropriate discount rate. She has the following information available:
Risk-free-rate = 8%
Market Beta = 1.0
Company Beta = 1.1
Project Beta = 1.2
Expected market return = 13%
Trailing 12-months market return = 12%
Which of the following is closest to the most appropriate discount rate? A. 13.5%. B. 13.0%. C. 14.0%.
