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7. A publicly-traded firm is politically connected. The government of the country the firm is located has implemented laws that guarantee that the firm will

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7. A publicly-traded firm is politically connected. The government of the country the firm is located has implemented laws that guarantee that the firm will earn a very high, fixed profit every year. Because of this guaranteed high profit, do you expect that the return on the stock of this firm will be high? (Assume that the guarantee is ironclad; that is, there is no expectation that the government will renege on this guarantee.)

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