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Problem 8-5 Beta and Required Rate of Return...

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Problem 8-5 Beta and Required Rate of Return A stock has a required return of 11 percent; the risk-free rate is 7 percent; and the market risk premium is 4 percent. a.) What is the stock?s beta? b.) If the market risk premium increased to 6 percent, what would happen to the stock?s required rate of return? Assume the risk-free rate and the beta remain unchanged.

 

Paper#8540 | Written in 18-Jul-2015

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