5. Assume that Rf = 5 percent and Km = 10.5 percent. Compute Kj for the following...
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5. Assume that Rf = 5 percent and Km = 10.5 percent. Compute Kj for the following betas, using Formula 11 A-2.
a. 0.6
b. 1.3
c. 1.9 6. In the preceding problem, assume an increase in interest rates changes Rf to 6.0 percent, and the market risk premium (Km — Rf) changes to 7.0 percent.
Compute Kj for the three betas of 0.6, 1.3, and 1.9.
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Related Book For 
Foundations Of Financial Management
ISBN: 9780073382388
13th Edition
Authors: Stanley B. Block, Geoffrey A. Hirt, Bartley R. Danielsen
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