Question: ABC Corporation's share had a rate return (r) that equates to 11.50% last year since 1. the market risk premium (MRP) was equal to 4.75%.
"ABC" Corporation's share had a rate return (r) that equates to 11.50% last year since
1. the market risk premium (MRP) was equal to 4.75%. and
2. the risk -free rate (Rf) on US treasury bills was equal to 5.50%
Now assume that there is a change in investor risk aversion and the market risk premium rises by 2%
What is "ABC" Corporation's new required return if The riskfree rate and "ABC" Corporation's beta remain fixed?
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