Problemfantasty corp has a beta of 16 and is currently in, Ask an Expert

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Problem:

Fantasty Corp has a beta of 1.6 and is currently in equilibrium. The required rate of return on the stock is 14.00% 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.

Required:

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

Note: Please show guided help with steps and answer.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91169091

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