A company is considering a number of non-mutually exclusive acquisitions. Possible targets are: 1) Firm A,...

A company is considering a number of non-mutually exclusive acquisitions. Possible targets are: 1) Firm A, with a beta equal to 1 and a projected return on the equity investment of 9%, 2) Firm B, with a beta equal to 2 and a projected return on the equity investment of 32%, 3) Firm C, with a beta equal to 3 and a projected return on the equity investment of 31%. Assume a risk free rate equal to zero and a 10% market risk premium. Under the CAPM, the company should

acquire all three targets

acquire targets A and B, but not C.

acquire targets B and C, but not A

acquire targets A and C, but not B.

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jeff jeffy answered 1 year ago

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