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Business, 08.04.2020 03:09 girlwonder326

Bell Computers is a computer hardware company with an equity beta of 1.5, whereas Macrosoft is a software company with an equity beta of 1.2. Assume that both firms are all-equity financed. Suppose that Macrosoft wants to invest in a project to build computer hardware, like Bell. What is the appropriate discount rate for this project? Assume that the CAPM holds. The risk-free rate is 1% and the market risk premium is 6%.

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