Question: Data for Dana Industries is shown below. Now Dana acquires some risky assets that cause its beta to increase by 30%. In addition, expected inflation

Data for Dana Industries is shown below. Now Dana acquires some risky assets that cause its beta to increase by 30%. In addition, expected inflation increases by 2.00%. What is the stock's new required rate of return?
Initial beta....................................................1.00
Initial required return (rs) ..............................10.20%
Market risk premium, RPM..............................6.00%
Percentage increase in beta.............................30.00%
Increase in inflation premium, IP.......................2.00%
1. 14.00%
2. 14.70%
3. 15.44%
4. 16.21%
5. 17.02%

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