Problem 12.27 – CAPM
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
Determine the following: risk premium, required return, does it have positive NPV, what is its beta.
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Determine the following: risk premium, required return, does it have positive NPV, what is its beta.
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Given the internal rate of return, beta’s, risk-free rate, and expected rate of return… determine the required rate of return, if the project should be accepted, the required rate of return on the project, and should it be accepted.
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Given the treasury bill rate, market risk premium, and the beta and internal rate of return… figure out the project costs of capital and which capital investments have positive NPVs.
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Given perpetual income, T-bill rate, and expected market return… figure out the property value.
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