If he were that kind of hands-on manager, this mess might not have happened in the first place.
The real risk-free rate is 4%. 1. The real risk-free rate is 4%. Inflation is expected to be 3% this year and 5% during the next 2 years. Assume that the maturity risk premium is zero.
The risk-free rate is 10% and the market risk premium is 5%. The firm should: a.Reject the project; its return is less than the firmâs required rate of return on the project of 16.9%. b.Accept the project; its return is greater than the firmâs required rate of return on the project of 12.05%.