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Decker's is a chain of furniture retail stores

Finance

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Decker's is a chain of furniture retail stores. Furniture Fashions is a furniture maker and a supplier to Decker's. Decker's has a beta of 1.38 as compared to Furniture Fashion's beta of 1.12. The risk-free rate of return is 3.5 percent and the market risk premium is 8 percent. What discount rate should Decker's use if it considers a project that involves the manufacturing of furniture?

Multiple Choice

12.46 percent

14.08 percent

14.54 percent

13.50 percent

12.92 percent