Q9.20. To value an ordinarily risky project, that is, a project with a beta in the vicinity

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Q9.20. To value an ordinarily risky project, that is, a project with a beta in the vicinity of about 1, what is the relative contribution of your personal uncertainty (lack of knowledge) in

(a) the risk-free rate,

(b) the equity premium,

(c) the beta, and

(d) the expected cash flows? Consider both long-term and short-term investments. Where are the trouble spots?

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