EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN: 9781337514835
Author: MOYER
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 12, Problem 6P
Summary Introduction
To determine: Whether person H make the investment or not.
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The Hartley Hotel Corporation is planning a major expansion. Hartley is financed 100 percent with equity and intends to maintain this capital structure after the expansion. Hartley’s beta is 0.8. The expected market return is 15 percent, and the risk-free rate is 8 percent. If the expansion is expected to produce an internal rate of return of 14 percent, should Hartley make the investment? Round your answer to one decimal places.
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Chapter 12 Solutions
EBK CONTEMPORARY FINANCIAL MANAGEMENT
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