Indifferent to purchasing the stock

Reference no: EM13974751

Suppose that, the president, receives a proposal for a new stock. The investment needed to take a position in the stock is $50 million, it will have an expected return of 15 percent, and its estimated beta coefficient is 2.0. Shouldthe new stock be purchased? At what expected rate of return should the fund be indifferent to purchasing the stock?

Reference no: EM13974751

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