Answer Happy

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. If TechInc cross-lists to gain access to global capital markets, the global CAPM implies that when the world market increases by 1 percent, that TechInc will increase by percent TechInc Corr(Ri Rj) Local 0.75 1.00 E(R)%) ? 1.00 TechInc Local Market World World 0.70 0.85 1.00 SD (%) 16 13 12 10 8 O 0.93 percent 0.86 percent O 0.61 percent