Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question 7

Transcribed Image Text:Venture capital required rate of return. Red Devil Investors has a success rate of one project for every four funded. Red Devil has an average loan period of 3
years and requires a portfolio return of 26.8%. If you borrow from Red Devil, what is your annual cost of capital?
What is the annual cost of capital?
%. (Round to four decimal places.)
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