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You are considering acquiring a firm that you believe can generate expected free cash flows of $10,000 a year forever. Howeven, you recognize that those

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You are considering acquiring a firm that you believe can generate expected free cash flows of $10,000 a year forever. Howeven, you recognize that those cash flows are uncertain. a. Suppose you belleve that the beta of the firm is 0.4. How much is the firm worth if the risk-free rate is 5% and the expected market risk premium is 98 ? (Do not round the discount rate in your calculation. Round your answer to the nearest cent.) tho value of the firn b. By how much will you misvalue the firm if its beta is actually 0.5 ? (Do not round the discount rate in your calculation. Do not round intermediate calculations, Round your answer to the nearest cent. Enter your answer as positive value.) By underestinating beta, you hould the firn by 5

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