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7) The risk-free rate is 3.73% and the market return is 9.01%. You are selling a firm with a perpetual cash flow of $3000 but
7) The risk-free rate is 3.73% and the market return is 9.01%. You are selling a firm with a perpetual cash flow of $3000 but you are unsure of its risk. If you think that its beta is 2.91 but its beta is actually -2.33 , you are:
Aasking for more than what it is worth.
B asking for less than what it is worth.
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