Lower expected rate of return than corporate bonds

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1. How would you explain to a board of directors that an investment proposal that has an initial investment cost of $1 million may actually immediately increase the value of the firm?

2. Preferred stock sometimes offers a lower expected rate of return than corporate bonds. Agree or disagree, and why.

The historical risk premium is a measure of market risk aversion, and changes over time depending on market conditions and expectations. Agree or disagree, and why.

Reference no: EM131987069

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