If a firm has a market beta of 0.9, is subject to an income tax rate of 35 percent, has a risk-free rate of 6 percent, a market risk premium of 7 percent, and has a market value of debt to market value of equity ratio of 60 percent, what does the market expect the firm to generate in terms of equity returns using CAPM?
a. 6%
b. 7%
c. 12.3%
d. 13%
C
12.3% = [6.0 + (0.9 x .07)]
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Finding the best solution to a business problem or opportunity describes the attention to details characteristic that a systems analyst should exhibit during the requirements determination phase
Indicate whether the statement is true or false