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Should the new share be purchased

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Question - Suppose Vijay TikiTogs, the president, receives a proposal for a new share. The investment needed to take a position in the stock is $50 million, it will have an expected return of 18 percent, and its estimated beta coefficient is 2.0. Should the new share be purchased? At what expected rate of return should Vijay be indifferent to purchasing a share?

Reference no: EM132083902

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