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ID: 1171310 • Letter: M

Question

MindTap. Cengagx Se re https ho engage com stati nb/u/index.html? bld-825492&b; Nodeld-317863853&deploymentld; 4870521768840973771 16 6137&elSBN-9781305403802; &p; entld EXOnline Se vices G dashboard anywhere D https://agate ayadi a https://zealcreditun Davenport Universit a Click On Detroit De D 2nd Grade Kinder ep ?HeartRadi Listen t Anice Johnson ? work ent: Week 4 Homework Assignment Score: 30.009% Save Submit Assignment for Grading Problem 8.03 4 Question 5of 10 Check My Work (3 remaining) 8-4: The Relationship Between Risk and Rates of Return Required rate of return Assume that the risk-free rate is 7% and the expected return on the market is 13% What is the required rate of return on a stock with a beta places. 21? Round your ars er to two decimal Check My Work (3 remaining)

Explanation / Answer

rRF= 7%; rM= 13%; b = 2.1; r = ?

r=7%+(11-7)%*2.1

r=15.4%

therfore the required rate of return is equal to 15.40%

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