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Calculate for Best Inc., assuming that (1) investors expect a 2.5% rate of inflation in the future, (2) the real risk-free rate is 1.5%, (3) the market risk premium is 3.0%, (4) the firm has a beta of 1.50, and (5) its realized rate of return has averaged 10.0% over the last 5 years.

(1) What is the equity risk premium?

(2) What is the required rate of return?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92092400

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