Assume that the risk-free rate of interest is 6% and the expected rate of return on the market is 16%. i am buying a firm with an expected perpetual cash flow of $1,000 but am unsure of its risk. if i think the beta of the firm is .5, when in fact the beta is really 1, how much more will i offer for the firm than it is truly worth?

Read the scenario. alfonso is 19 years old and has a high school diploma. recently, he was promoted to assistant manager at the fast-food restaurant where he has worked since the age of sixteen. his dream is to become the restaurant’s manager. what is his best option for achieving his dream? he should find another job and work his way up to a higher position. he should hope that his manager transfers to another location and that he is his replacement. he should attend classes at the local college to receive training in management. he should work hard, work longer hours, and remain assistant manager.