Explore BrainMass

Explore BrainMass

    Calculate Stock's Beta: Required Rate of Return & Risk Free Rate

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    A stock has a required return of 11 percent; the risk free rate is 7 percent; and the market risk premium is 4 percent.

    What is the stock's beta?

    If the market risk premium increased to 6 percent what would happen to the stock's required rate of return? Assume the risk free rate and the beta remained unchanged.

    © BrainMass Inc. brainmass.com June 4, 2020, 12:08 am ad1c9bdddf
    https://brainmass.com/business/beta-and-required-return-of-a-project/calculate-stocks-beta-required-rate-return-risk-free-rate-321127

    Solution Summary

    This solution calculates the stock's beta given the required rate of return and risk free rate.

    $2.19

    ADVERTISEMENT