Discuss why these assumptions might not be satisfied in


1. Think about a scenario where a firm is using the same fixed historical cost of capital for any new possible investments it would be going to undertake. Discuss shortly what could be the potential problems the firm faces if it continues to use the same practices?

2. Name at least four assumptions behind CAPM and discuss why these assumptions might not be satisfied in real life.

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Financial Management: Discuss why these assumptions might not be satisfied in
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