Question
Youve identified a comparable firm for a new division you are heading up. The comparable has an equity beta of 1.4 and its debt has
Youve identified a comparable firm for a new division you are heading up. The comparable has an equity beta of 1.4 and its debt has a beta of 0.3. The equity of the comparable has a market value of $30B and has $4B in debt outstanding. The market risk premium is 6% and the risk-free rate is 2%. What is the appropriate discount rate to use for your divisions assets/projects?
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Budgets And Financial Management In Higher Education
Authors: Margaret J. Barr, George S. McClellan
3rd Edition
1119287731, 9781119287735
