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Initialy firm x has a beta of 1.3, when Rrf=7% and Rm=12percent. The firm now sells 10 per

Initialy firm x has a beta of 1.3, when Rrf=7% and Rm=12percent. The firm now sells 10 per

Initialy firm x has a beta of 1.3, when Rrf=7% and Rm=12percent. The firm now sells 10 percent of its assets (Beta=1.2) anduses the proceeds to purchase another asset, a machine with a betaof .8

What is the required rate of return on the machine?

What is the new overall required rate of return for firm x?

Abhinav 04-Dec-2019

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