Question: The unlevered beta of electronics firms on average is 1 1

The unlevered beta of electronics firms, on average, is 1.1. The riskless rate is 6.5%, and the market risk premium is 6%.
a. Estimate the expected return, using the CAPM.
b. If you are a venture capitalist, why might you have a target rate of return much higher than this expected return?

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  • CreatedApril 15, 2015
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