Question: b. What is the required return for the project? What assumptions are critical? (Note: To solve, you may use the technique described in the special

b. What is the required return for the project? What assumptions are critical?

(Note: To solve, you may use the technique described in the special section

"Calculating Betas Manually.")

m

; Solutions to Self- correction Problems Situation Equation Required Return 1 10% + (15% - 10%)1.00 15.0%

2 14% + (18% - 14%).70 16.8 3 8% + (15% - 8%)1.20 16.4 4 11% + (17% - 11%).80 15.8 5 10% + (16% - 10%)1.90 21.4

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