Suppose that TechInc consists of a perpetual cash flow of $15M USD that will arrive...
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Suppose that TechInc consists of a perpetual cash flow of $15M USD that will arrive next year. Assume the risk free rate is 2 percent. Cross-listing requires that firms pay additional legal and accounting expenses on an annual basis. If the present value of the additional compliance expenses is $20M USD, given the table below should TechInc cross-list? Corr(Rj,Rj) TechInc Local World SD (%) E(R)(%) ? TechInc 1.00 0.75 0.70 16 Local Market 1.00 0.85 13 10 World 1.00 12 8 Yes No Not enough information
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