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Author Question: You have been offered a project paying 300 at the beginning of each year for the next 20 years. The ... (Read 211 times)

crazycityslicker

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on: Jul 10, 2018
You have been offered a project paying 300 at the beginning of each year for the next 20 years. The first payment occurs at the beginning of the first year.
 
  What is the maximum amount of money you would invest in this project if you expect 9 percent rate of return to your investment? (Round to the nearest whole dollar)
  A) 2,738
  B) 2,985
  C) 15,347
  D) 6,000

Question 2

A common stock currently has a beta of 1.3, the risk-free rate is an annual rate of 6 percent, and the market return is an annual rate of 12 percent.
 
  The stock is expected to generate per-share benefits of 5.20 during the coming period. A toxic spill results in a lawsuit and potential fines, and the beta of the stock jumps to 1.6. Assuming zero growth the new equilibrium, price of the stock ________.
  A) will be 37.68
  B) will be 43.33
  C) will be 33.33
  D) cannot be determined from the information given


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CAPTAINAMERICA

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Reply #1 on: Jul 10, 2018
Answer to Question 1

B

Answer to Question 2

C


crazycityslicker

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Reply #2 on: Jul 10, 2018
Thank you


CAPTAINAMERICA

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Reply #3 on: Jul 10, 2018
No problemo


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