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Benja is considering investing $ 1 , 5 0 0 in either of two stocks, A or B . She plans to hold the stock
Benja is considering investing $ in either of two stocks, A or B She plans to hold the stock for exactly years and expects both stocks to pay $ in annual endofyear cash dividends. After years, she estimates that she will sell stock A for $ and stock B for $ Stock A by Benjas calculation has average risk, stock B is quite a bit riskier. She needs to earn an annual return on an averagerisk stock of however because stock B is considerably riskier, she will need this return to be from it Benja has calculated the riskadjusted net present values NPVs for both stocks. Both investments have acceptable NPVs $ on a riskadjusted basis, so which project should she invest in and why?
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