# Question: A stock has a required return of 11 percent the

A stock has a required return of 11 percent; the risk-free rate is 7 percent; and the market risk premium is 4 percent.

A) What is the stock’s beta?

B) If the market risk premium increased to 6 percent, what would happen to the stock’s required rate of return? Assume the risk-free rate and beta remains unchanged.

A) What is the stock’s beta?

B) If the market risk premium increased to 6 percent, what would happen to the stock’s required rate of return? Assume the risk-free rate and beta remains unchanged.

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