Create an Account

Already have account?

Forgot Your Password ?

Home / Questions / I am buying a firm with an expected perpetual cash flow of $1000 but am unsure of its risk...

I am buying a firm with an expected perpetual cash flow of $1000 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

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 .5, when in fact the beta is really 1, how much more will I offer for the firm than it is truly worth?Assume that the risk-free rate of interest is 6% and the expected rate of return on the market is 16%.View Solution:
I am buying a firm with an expected perpetual cash

 

May 14 2020 View more View Less

Answer (Solved)

question Subscribe To Get Solution

Related Questions