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T ANSWERS: Explain the CAPM What are the conditions underlying the constant growth stock valuation? (5) Why is cost of capital concept critical for financial

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T ANSWERS: Explain the CAPM What are the conditions underlying the constant growth stock valuation? (5) Why is cost of capital concept critical for financial managers? (5) What is the reinvestment rate assumption behind the IRR calculations? Why is MIRR considered an improvement over IRR? (5) model to someone not familiar with any finance

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