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Leverage (Cost of Capital): Consider a leveraged firm’s projects that have similar risks to the firm as a whole. Is the discount rate for the projects higher or lower than the rate computed using the security market line? Why?

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Leverage (Cost of Capital): Consider a leveraged firm’s projects that

have similar risks to the firm as a whole. Is the discount rate for the projects higher or lower than the rate computed using the security market line? Why?

 
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