The Third Question:
Answer the following Cases
1- Calculate the required rate of return for
Ali Inc., assuming that :
Investors expect a 8% rate of inflation in the future.
The real risk free rate is 6%.
The market risk premium is 10%.
The firm has a beta of 2
Its realized rate of return has averaged 30% over the last 10
years.
2) Nader Construction Co. is considering a new inventory system
that will cost $1500,000. The system...