You are buying a firm with an expected perpetual cash flow

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You are buying a firm with an expected perpetual cash flow of $1000 but are unsure of its risk. If you think the beta of the firm is zero, when the beta is really 1. How much more will you offer for the firm than it is really worth? Assume the risk free rate is 8% and expected rate of return on the market is 18%.

Reference no: EM13623139

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