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    Practical Desks Inc.'s new required rate of return

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    Practical Desks Inc. has a beta coefficient of 0.7 and a required rate of return of 15 percent. The market risk premium is currently 5 percent. If the inflation premium increases by 2 percentage points, and Practical Desks acquires new assets which increase its beta by 50 percent, what will be Practical Desks' new required rate of return?

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    https://brainmass.com/business/beta-and-required-return-of-a-project/practical-desks-incs-new-required-rate-return-112886

    Solution Preview

    Practical Desks Inc. has a beta coefficient of 0.7 and a required rate of return of 15 percent. The market risk premium is currently 5 percent. If the inflation premium increases by 2 percentage points, and Practical Desks acquires new assets ...

    Solution Summary

    This solution is comprised of a detailed explanation to find Practical Desks Inc.'s new required rate of return.

    $2.19

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