A. The financial manager has to decide between invest in a project and pay dividends to shareholders.
B. Shareholders have to decide between invest in the corporation or other financial assets.
C. The hurdle rate is the maximum acceptable rate of return on investment for that level of risk.
Suppose the expected price of a stock of firm A is $9. The expected price of a stock B is $7. What will be the expected value of a portfolio consisted in one stock of A and one of B?