Assume that the risk-free rate of interest is 6% and the expected rate of return on the market is 16%. I am buying a firm with a

Question

3 years ago

9

Assume that the risk-free rate of interest is 6% and the expected rate of return on the market is 16%. I am buying a firm with a

n expected perpetual cash flow of $1,000 but am unsure of its risk. If I think the beta of the firm is .5, when in fact the beta is really 1, how much more will I offer for the firm than it is truly worth?

Business

1 answer:

algol [13] · Answer 1 · 2022-07-19T18:02:01+03:00

algol [13]3 years ago

5 0

This wouldn’t by chance have multiple choice options would it?