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8. A decision tree shows a 60% probability of $4.5 million in returns for the upcoming year and a 40% chance of - $0.5 million
8. A decision tree shows a 60% probability of $4.5 million in returns for the upcoming year and a 40% chance of - $0.5 million in returns. What is the maximum you would invest today in this project if the cash inflow occurs one year in the future and the discount rate is 9.5% and the project beta is 1.25? A) 2.28M B) 2.5M C) 4.1M D) None of the above Lower counon bonds have greater interest rate risk than higher coupon bonds
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