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    Calculating the required rate of return

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    A company you are researching has common stock with a beta of 1.35. Currently, Treasury bills yield 2.5%, and the market portfolio offers an expected return of 11.5%. What is the required return on this common stock?

    1. 10.93%
    2. 11.86%
    3. 21.43%
    4. 14.65%

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    Solution Summary

    Solution describes the steps to calculate required rate of return in the given case.