Question 01: Base Plastics Inc. has a B of O.90. If the government treasury-bills are giving a return of 3%; and if the market is giving a return of 9%, what is the expected rate of return on Base Plastics' shares?
Question 01: Base Plastics Inc. has a B of O.90. If the government treasury-bills are giving a return of 3%; and if the market is giving a return of 9%, what is the expected rate of return on Base Plastics' shares?
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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Transcribed Image Text:Question 01: Base Plastics Inc. has a B of O.90. If the government treasury-bills are giving a return of 3%;
and if the market is giving a return of 9%, what is the expected rate of return on Base Plastics' shares?
Question 02: You have invested $36,000 in a project. The expected year end cash flows are $15,000;
$11,000; $12,000; and $14,000. The discount rate is 9%.
a. Calculate the payback period
b. Calculate the discounted payback period
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