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Required Rate of Return MCQ

Find the required rate of return for equity investors of a firm with a beta of 1.3 when the risk free rate is 5%, the market risk premium is 5%, and the return on the market is 10%.
A) 11.5%
B) 13.0%
C) 16.5%
D) 18.0%

Solution Summary

Quick calculations show how to pick the option that gives the ROR for equity investors.