A corporation has a beta of 1.3. the risk free interest, Ask an Expert

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A corporation has a beta of 1.3. The risk free interest rate today is 8 percent and the return on a market portfolio of stocks is 14 percent. [Therefore the market risk is 6%, the difference the market return and the risk free return].

A. Find the required return (equity cost) on the company's stock?
B. If the risk free rate rises to 9%, what will the required rate of return on the company's stock?
C. If the beta of this company were 0.8, what would the its required rate of return?

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M9308456

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