Stock a has a beta of 130 and its required return is 1325, Ask an Expert

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Stock A has a beta of 1.30, and its required return is 13.25%. Stock B's beta is 0.90. If the risk-free rate is 4.75%, what is the required rate of return on B's stock? (Hint: First find the market risk premium.)

1. 10.63%

2. 7.69%

3. 12.08%

4. 9.28%

5. 10.28%

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Financial Management, Finance

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