Determining the appropriate discount rate for an expansion


Assignment:

Suppose the stock of CBD Ltd, a manufacture of toys, has a beta of 2.7. The firm is 100-percent equity financed. Assume a risk-free rate of 3-percent and a market risk premium of 6-percent. What is the appropriate discount rate for an expansion of this firm?

Your answer must be typed, double-spaced, Times New Roman font (size 12), one-inch margins on all sides, APA format.

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Operation Research: Determining the appropriate discount rate for an expansion
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