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Suppose you are valuing a future stream of high risk (high beta) cash outflows. High risk...

Suppose you are valuing a future stream of high risk (high beta) cash outflows. High risk means a high discount rate. But the higher the discount rate, the less the present value. This seems to say that the higher the risk of cash outflows, the less you should worry about them! Can that be right? Should the sign of the cash flow affect the appropriate discount rate? Explain.

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jeff jeffy answered 1 year ago
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