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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. Is 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.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M992506

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