=+The finance department has assembled the following information: The company has an equity beta of 1.50, which

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=+The finance department has assembled the following information:

The company has an equity beta of 1.50, which may be taken as the appropriate adjustment to the average risk premium. The yield on risk-free government securi-

ties is 7 per cent and the historic premium above the risk-free rate is estimated at 5 per cent for shares.

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