Assume that Temp Force has a beta coefficient of 1.2, that the risk-free rate (the yield on

Question:

Assume that Temp Force has a of 1.2, that the risk-free rate (the yield on T-bonds) is 7%, and that the market risk premium is 5%. What is the required rate of return on the firm’s stock?

Beta Coefficient
Beta coefficient is a measure of sensitivity of a company's stock price to movement in the broad market index. It is an indicator of a stock's systematic risk which is the undiversifiable risk inherent in the whole financial system. Beta coefficient...