investment
The risk-free rate is 5.19% and the market return is 11.08%. You are buying a firm with a perpetual cash flow of $9000 but you are unsure of its risk. If you think that its beta is 2.88 but its beta is actually -2.61, you are
A—offering more than what it is worth.
B— offering less than what it is worth.
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Assume that the risk-free rate of interest is 4% and the expected rate of return on...
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how do you find (b) without knowing the risk free?
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Assume that the risk-free rate of interest is 4% and the expected rate of return on the market is 14%. I am buying a firm with an expected perpetual cash flow of $3,000 but am unsure of its risk. If I think the beta of the firm is 0.5, when in fact the beta is really 1, how much more will offer for the firm than it is truly worth? (Do not round intermediate calculations. Round your answer to 2...
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