Question: CCC Corp. has beta 1.5 and is currently in equilibrium. Required rate of return on stock is 12% versus required return on average stock which

CCC Corp. has beta 1.5 and is currently in equilibrium. Required rate of return on stock is 12% versus required return on average stock which is 10%. Now the required return on average stock increases by 30% (not percentage points). Neither betas nor risk free rate change. What would CCC’s new required return be?

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