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Consider a one-year project in which you must invest 132m today and expect to receive a payout of 145m towards the end of the project
Consider a one-year project in which you must invest 132m today and expect to receive a payout of 145m towards the end of the project which is set to be completed within one-year. The CAPM equation holds within this economy. If the risk-free rate is 2.5% and the expected market return is 7%, what might be the the highest possible project beta before the NPV of the project becomes negative?
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