Question
Firm A has a project available that offers a 10% return on average . Suppose Risk free rate = 2% The stock market return premium
Firm A has a project available that offers a 10% return on average .
Suppose Risk free rate = 2%
The stock market return premium (Rm - Rf) is 7%, Beta = 1.3 (assume alpha = 0).All returns are on an annual basis.
Should Company A go ahead with this project?
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Intermediate Financial Management
Authors: Eugene F. Brigham, Phillip R. Daves
11th edition
978-1111530266
