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    Difference in 2 Companies' ROR

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    Kamath Manufacturing Company has a beta of 1.45, while Gehr Industries has a beta of 0.85. The required return on the stock market is 12.00%, and the risk-free rate is 5.00%. What is the difference between Kamath's and Gehr's required rates of return? (Hint: first, find the market risk premium, then find required returns on the stocks.)

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    https://brainmass.com/business/beta-and-required-return-of-a-project/kamath-manufacturing-company-has-a-beta-of-1-45-while-gehr-industries-has-a-beta-of-0-85-169764

    Solution Summary

    Brief calculations show how to find the difference in required rates of return when given two companies' betas.

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