What must risk-free rate be

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1. Talk on the 3 cases of manipulation of assets and 2 cases of manipulation of debts and how that affects EPS and balance sheet approaches to valuing stocks.

2. In 300-400 words, describe how the payback period is calculated and describe information this measure provides about a sequence of cash flow. What is the payback criterion decision rule?

3. A stock has an expected return of 0.13, its beta is 1.83, and the expected return on the market is 0.06. What must the risk-free rate be? (Hint: Use CAPM) Enter the answer in 4 decimals e.g. 0.0123.

Reference no: EM131925201

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