# Question: the equity beta of a firm that is financed with...

###### Question details

The equity beta of a firm that is financed with 45% debt and 55% equity is 1.1. The beta of the debt is 0.3. The expected return on the market is 11%, and the risk -free rate is 3%. What rate of return should this firm require on its projects? I get 12.1% but the following are the options:

A. 14%

B. 8.9%

C. 15.1%

D. -36.5%