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MBA,MCS,M.phil
Devry University
Jan-2008 - Jan-2011
MBA,MCS,M.Phil
Devry University
Feb-2000 - Jan-2004
Regional Manager
Abercrombie & Fitch.
Mar-2005 - Nov-2010
Regional Manager
Abercrombie & Fitch.
Jan-2005 - Jan-2008
Beta and the Cost of Equity
1. Furniture Depot, Inc., is an all-equity firm with a beta of 0.95. The market-risk premium is 9 percent and the risk-free rate is 5 percent. The company must decide whether or not to undertake the project that requires an immediate investment of $1.2 million and will generate annual after-tax cash flows of $340,000 at year-end for five years. If the project has the same risk as the firm as a whole, should Furniture Depot undertake the project?
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