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8.4 BETA AND REQUIRED RATE OF RETURN A stock has a required return of 12%, the risk-free rate is 4.5%, and the market risk

8.4 BETA AND REQUIRED RATE OF RETURN A stock has a required return of 12%, the risk-free rate is 4.5%, and the market risk premium is 5%. 1. What is the stock's beta? 1. If the market risk premium increased to 6%, what would happen to the stock's required rate of return? Assume that the risk-free rate and the beta remain unchanged.

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