Recently, Kellie determined that the required rate of return for Stock Q is 11 percent. In her
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Recently, Kellie determined that the required rate of return for Stock Q is 11 percent. In her analysis, she determined that the risk-free rate of return, rRF, is 4 percent and that the required return on the market portfolio, rM, is 9 percent. Today, however, Kellie received new information that indicates the market risk premium, RPM, is actually 1 percent higher than she estimated in her original analysis. Based on this new information, what should be the required rate of return for Stock Q?
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