Question: Company A has a beta of 0 . 7 0 , while Company B ' s beta is 1 . 0 5 . The required
Company A has a beta of while Company Bs beta is The required return on the stock market is and the riskfree rate is What is the difference between As and Bs required rates of return? Hint: First find the market risk premium, then find the required returns on the stocks.
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