Explore BrainMass

Explore BrainMass

    CAPM and Hurdle Rates

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    A project under consideration has an internal rate of return of 14 percent and a beta of .6. The risk-free rate is 4 percent, and the expected rate of return on the market portfolio is 14 percent. Should the project be accepted? Should the project be accepted if its beta is 1.6? Why does the answer change?

    © BrainMass Inc. brainmass.com June 3, 2020, 10:24 pm ad1c9bdddf
    https://brainmass.com/business/capital-asset-pricing-model/capm-hurdle-rates-229306

    Solution Preview

    Answer:

    Given that,
    IRR =14%
    Beta, b=0.6
    Risk free rate, Rf=4%
    Market ...

    Solution Summary

    This solution is comprised of answers related with CAPM and Hurdle Rates.

    $2.19

    ADVERTISEMENT