Clear Contacts is evaluating the following Independernt projectsProjectIRRRiskCD15.0%HighAverageLowGH13.0RS10.5Clear's policy is to adjust its average required rate of returm, which equals 12 percent, when the risk associeted with a project is determined to be either higher-than-average or lower-than-average. The adjustment for higher-than-average risk projects is 4 percent and the ad ustment for lower-than-average nsk projects is 2 percentWhich projectis) should Ciear purchase?O Projects CD and CH shouid be pchased, because they both have RRs greater than 12 percen.O Pojects GH and RS should be purchasedO Only Preject Co should be purchased, becase has the highest RRO None of the perojects should be perchased.O Only Project RS should be purchased.Greater Good Glass (GGG) plans to issue a new bond with a coupon rate of interest equal to the yield to matunity (YTM) on its existing bond. The existing bond, whichwas issued five years ago, has a coupon rate of interest equal to 7.0 percent, 15 years remaining until maturity, and a face value equal to $1.000. Interest is paidsemiannually. The market value of the existing bond is $1,335.95. What is GGG's before-tax cost of debt, ra? GGG's marginal tax rate is 35 percentO 7.96%O 4.00%O 485%O 298%O 2.00%

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Clear Contacts is evaluating the following independent projects IRR Risk Project CD 15.0% Hgh Average GH 13.0 RS 10.5 Low Clear's policy is to adjust its average required rate of return, which equats 12 percent, when the risk associoted with a project le determined to be either higher-than average or lower-than-average. The adjustment for higherthan-average risk projects is 4 percent and the adjustment for lower-than-average nsk projects is 2 percent Which projectts) should Ciear purchase? O Projects CD and CH shouid be puchased, becase they both have Ms greater than 12 percen. O Pojects GH and RS should be purchased O Orly Project Co sould be purchased, becane han the highest MR ONone of the projects should be perchused. O Only Project RS sheuld be purchased.

Clear Contacts is evaluating the following independent projects IRR Risk Project CD 15.0% Hgh Average GH 13.0 RS 10.5 Low Clear's policy is to adjust its average required rate of return, which equats 12 percent, when the risk associoted with a project le determined to be either higher-than average or lower-than-average. The adjustment for higherthan-average risk projects is 4 percent and the adjustment for lower-than-average nsk projects is 2 percent Which projectts) should Ciear purchase? O Projects CD and CH shouid be puchased, becase they both have Ms greater than 12 percen. O Pojects GH and RS should be purchased O Orly Project Co sould be purchased, becane han the highest MR ONone of the projects should be perchused. O Only Project RS sheuld be purchased.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter11: Capital Budgeting And Risk

Section: Chapter Questions

Problem 19P

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