Calculate project-specific cost of capital for firms

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Reference no: EM132071972

1. “It is argued that the capital asset pricing model can be used to calculate a project-specific cost of capital for firms.” Analyse the statement above with reference to the key concepts of systematic risk, business risk and financial risk. Relevant examples or illustrations should be given.

2. You wish to accumulate $2,000,000 at the end of 20 years. What amount should you deposit today in a bank that pays an interest of 6%? Continuing with the problem, what amount will you have to deposit today if, in year 10, you plan to deposit an additional $400,000 that you expect to receive from a maturing CD.

Reference no: EM132071972

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