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The discount rate used to discount future cash flows should: a. Be equal to yield on long-term U.S. Treasuries. b. Be 2% greater than yield

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The discount rate used to discount future cash flows should: a. Be equal to yield on long-term U.S. Treasuries. b. Be 2\% greater than yield on long-term U.S. Treasuries. c. Incorporate a risk premium equal to perceived risks and volatility of future cash flow stream. d. Usually will be 1% greater than yield on high-yield bonds

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