I am buying a firm with an expected perpetual cash flow of $630 but am...
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I am buying a firm with an expected perpetual cash flow of $630 but am unsure of its risk. If I think the beta of the firm is 0, when the beta is really 1, how much more will offer for the firm than it is truly worth? Assume the risk-free rate is 6% and the expected rate of return on the market is 18%. (Input the amount as a positive value.) Answer is complete but not entirely correct. Present value $ 3,500 difference
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