Question
How much will you pay for the business if you believe its market risk is the same as the market portfolio's? You are considering the
How much will you pay for the business if you believe its market risk is the same as the market portfolio's?
You are considering the purchase of a business that will provide perpetual income that should average $X per year. The Treasury bill rate is Y%, and the expected market risk premium is Z%.
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Financial Markets and Institutions
Authors: Anthony Saunders, Marcia Cornett
6th edition
9780077641849, 77861663, 77641841, 978-0077861667
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