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    Required Rate of Return

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    Please help with the following problem.

    I am not sure how to approach this one. I am trying to solve the problem in Excel. Please help with the formula(s) for this problem and how to solve in Excel.


    Calculate the required rate of return for Mars Inc.'s stock. The Mars's beta
    is 1.2, the rate on a T-bill is 4 percent, the rate on a long-term T-bond is 6
    percent, the expected return on the market is 11.5 percent, the market has
    averaged a 14 percent annual return over the last six years, and Mars has
    averaged a 14.4 return over the last six years.

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    Solution Preview

    You need to use the CAPM equation to get the answer
    Required Rate of Return = Risk free rate + (Expected ...

    Solution Summary

    The solution explains how to calculate the required rate of return on a stock.