1. To compute the required rate of return on equity in a company using the CAPM, is different from using the constant growth model in that it is necessary to know all of the following except : a. the market risk premium b. earnings of the next period. c. the market index returns. d. the risk free rate.
2. What is a cash budget? For what purpose should cash budgets be created?
3. You are offered an investment with a current price of $580. No payments will be made until year 9, at which time you will receive $900. What annual interest rate would you earn if you invested today? Show your inputs.