between systematic and unsystematic risk. Also explain why one of these types of risks is rewarded with a risk premium while the other type is not. c. The beta of a new machine is 1.2, and it gearing ratio (debt to equity) is 0.2.The tax rate is 30%, risk free rate is 5%, and market risk premium is 8%. What is the project cost of equity (COE)? i. Calculate the expected return, variance and standard deviation for the two equities: (a) a risk adverse investor (b) a risk loving investor

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