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Question 23 (25 points) The risk-free rate is 6% and the expected return of the market is 16%. You are buy- ing a firm with
Question 23 (25 points) The risk-free rate is 6% and the expected return of the market is 16%. You are buy- ing a firm with perpetual cash-flow of $1000 per year. You think the beta of the firm is 0.5, but in reality the beta is 1.0. How much more will you offer for the firm than it is truly worth
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