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  3. d) calculate the net present value, internal rate

d) Calculate the Net Present Value, Internal Rate of Return and Payback Period The financial...

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Accounting

d) Calculate the Net Present Value, Internal Rate of Return and Payback Period The financial controller is considering the use of the Capital Asset Pricing Model as a surrogate discount factor. The risk-free rate is 5 per cent. Year Stock Market Share Index Price 2008 2000 $15.00 2009 2400 $25.00 2010 2900 $33.00 2011 3500 $40.00 2012 4200 $45.00 2013 5000 $55.00 2014 5900 $62.00 2015 6000 $68.00 2016 6100 $74.00 2017 6200 $80.00 2018 6300 $83.33 e) Calculate the CAPM f) Explain why this figure may differ from that calculated above (i.e. Cost of equity Ordinary Shares)

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