Question
Polycorp is considering a new project. The project has beta () that is twice that of the firm's existing assets (projects). Polycorp's existing assets have
Polycorp is considering a new project. The project has beta () that is twice that of the firm's existing assets (projects). Polycorp's existing assets have a required return (cost of capital) of 10%, the market risk premium is 7% and the risk free rate is 3%. Calculate the beta for the new project. Provide your answer accurate to two decimal places.
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Contemporary Financial Management
Authors: R. Charles Moyer, William J. Kretlow, James R. Mcguigan
7th Edition
0538877766, 9780538877763
