Answer:
The correct solution is "$6,564.01". A further solution is given below.
Step-by-step explanation:
The given values are:
beta,
= 1.6
market return,
= 15%
cash flow,
= $2,000
risk free rate of interest,
= 3%
Now,
The stock return will be:
=

=

=

The actual worth of the firm will be:
=

=

=

=

With 0.8 beta, the stock return will be:
=

=

=

So that I'm paying for the firm,
=

=

=
($)
Hence,
I'm paying,
=

=
($)