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ioachidi_e
Jun 27, 2007, 12:20 AM
Returns on the market and Takeda Company’s stock during the last 3 years are shown below:

Year Market Takeda
1 -12% -14%
2 23 31
3 16 10

The risk-free rate is 7 percent, and the required return on the market is 12 percent. Takeda is considering a project whose market beta was found by adding 0.2 to the company’s overall corporate beta. Takeda finances only with equity, all of which comes from retained earnings. The project has a cost of $100 million, and it is expected to provide cash flows of $20 million per year at the end of Years 1 through 5 and then $30 million per year at the end of Years 6 through 10. What is the project’s NPV

Curlyben
Jun 27, 2007, 12:21 AM
Please refer to THIS ANNOUNCEMENT (https://www.askmehelpdesk.com/finance-accounting/announcement-read-me-first-expectations-homework-help-board.html)