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The common stock of 5A Precious Stone (SAPS) here in San Antonio has a Beta of 1.0. The current T-Bill rate is 3% and the
The common stock of 5A Precious Stone (SAPS) here in San Antonio has a Beta of 1.0. The current T-Bill rate is 3% and the market risk premium is at 20%. SAPS's capital structure is: 40% debt paying 6% to bond holders, and 60% equityr (stock). SAPS is also looking at a project that will generate $200,000 per year for 6 years with an up- front investment of $350,000. (a) Should theyr accept this? 0 Yes 0 No
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