Assume that the risk-free rate of interest is 6 and the, Ask an Expert

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Assume that the risk-free rate of interest is 6% and the expected rate of return on the market is 17%. I am buying a firm with an expected perpetual cash flow of $1,000 but am unsure of its risk. If I think the beta of the firm is 1, when in fact the beta is really 2, how much more will I offer for the firm than it is truly worth? (Do not round intermediate calculations. Round your answer to 2 decimal places.

Amount offered in Excess

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92718625

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