Problem 5 (The CAPM and the cost of capital)Sisyphean Industries is se

QUESTION

Problem 5 (The CAPM and the cost of capital)Sisyphean Industries is seeking to raise capital from a large group of investors to fund a new project. Suppose that the tangent portfolio has an expected return of 14% and a volatility of 20%. Sisypheans new project is expected to have a volatility¦
(a) (4) 1.75 (b) 14 x 1.75 = (1) 24% (c) No we wudnt use the previous no. as our model will give an incorrect present value that ways which would give a faulty¦

internal rate of return. Planning would become tough. we need to input our current rate value PLEASE RATE

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