Find the payback in years for the cash flow

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Reference no: EM131945453

1. Find the payback in years (to the nearest tenths place) for the following cash flow with a WACC of 4%:

Time Period Cash Flow Cumulative Out of Pocket

0 -100 -100

1 40 -60

2 50 -10

3 20 +10

4 70 +80

2. Suppose the risk free rate is 5% and that the market risk premium is 7%. What is the required return on the (1) the market, (2) a stock with a beta of 1.0, (3) a stock with a beta of 1.7?

Reference no: EM131945453

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