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Suppose you borrow $52689.42M when financing a gym with a cost of $90416.60M. You expect to generate a cash flow of $59142.00M at the end
Suppose you borrow $52689.42M when financing a gym with a cost of $90416.60M. You expect to generate a cash flow of $59142.00M at the end of the year if demand is weak, $88905.06M if demand is as expected and $117938.01M if demand is strong. Each scenario is equally likely. The current risk-free interest rate is 4.12% (risk of debt) and there's a 11.15% risk premium for the risk of the assets. What would be the realized return of equity if the demand is weak?
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