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Problem:

CCC Corp has a beta of 1.5 and is currently in equilibrium. The required rate of return on the stock is 12.00% versus a required return on an average stock of 10.00%. Now the required return on an average stock increases by 30.0% (not percentage points). Neither betas nor the risk-free rate change.

Task:

Question: What would CCC's new required return be?

Please provide step by step solution and also show all work.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91147099

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