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Briefly Answer in 1-3 Sentences each for the following two questions: A diversified, low-risk firm is considering investing in a high-risk project in a new
Briefly Answer in 1-3 Sentences each for the following two questions:
A diversified, low-risk firm is considering investing in a high-risk project in a new industry. Is it appropriate to use the firms WACC as the discount rate when evaluating this project? Why or why not?
When using the free cash flow model, if you have the value of the overall firm and the value of (net) debt (and assuming no preferred stock), how do you estimate the value of common stock?
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