Corporation's stock had a required return of 11.50% last year, when the risk-free rate was 5.50% and
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Corporation's stock had a required return of 11.50% last year, when the risk-free rate was 5.50% and the market risk premium was 4.75%. Now suppose there is a shift in investor risk aversion, and the market risk premium increases by 2%. The risk-free rate and corporation's beta remain unchanged. What is corporation's new required return?
Expert Answer:
The formula for calculating the required return on a stock is Required Return RiskFree R... View the full answer
Related Book For 
Fundamentals of Financial Management
ISBN: 978-0324664553
Concise 6th Edition
Authors: Eugene F. Brigham, Joel F. Houston
Posted Date:
