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Problem:

The markets in general are paying a 2% real rate of return. Inflation is expected to be 3%. ABC stock commands a 6% risk premium.

Required:

Question: What is the expected rate of return on ABC stock?

  • 2%
  • 5%
  • 8%
  • 11%

Note: Solve the problem and show all work.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M91174277

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