325.2
2.You work in finance at Starbucks. The executives
want to expand into flavored teas in bottles. The beta for
Starbucks is 1.3 and the beta for Snapple Teas is 1.5. The
expected return on the market is 12% and the risk-free rate is 4%.
What discount rate (opportunity cost of capital) should you apply
to the bottled tea expansion and WHY? (2 pts)