An increase in the discount rate will:

Select one:

a.Increase the present value of future cash flows.

b.Compensate for reduced risk.

c.Reduce the present value of future cash flows.

d.Have no effect on net present value.

To compute the required rate of return for equity (or cost of equity) in a company using the CAPM, it is necessary to know all of the followingEXCEPT:

Select one:

a.The beta for the firm.

b.The risk-free rate.

c.The earnings for the next time period.

d.The market return expected for the time period.