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Your firm just paid a dividend of $2.20 that is expected to grow at 5% and your beta is 0.8. You are considering an acquisition
Your firm just paid a dividend of $2.20 that is expected to grow at 5% and your beta is 0.8. You are considering an acquisition that would increase your growth rate to 7.5% and your beta to 1.2. If the risk-free rate is 2% and the expected market return is 8%, should you approve the acquisition? Yes O Not enough information to answer No
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