The DMT Company is financed entirely with equity. DMT has a beta of 1.20 and the current risk-free rate of 9.5%. If the expected market return (Km)is 14%, what rate of return should DMT require on a project of average risk? [ke=krf + (km-krf)(B)]
The following choices are one of the answers:
d. none of the above
The rate of return is determined. The response received a rating of "5" from the student who posted the question.