Question: Originally the risk-free rate is 2%. The required return on the overall stock market is 8%, so the market risk premium is 6%. An individual

Originally the risk-free rate is 2%. The required return on the overall stock market is 8%, so the "market risk premium" is 6%. An individual stock has a Beta coefficent of 1.2. If general interest rate increases cause the risk-free rate to increase by 1 percent, while the market risk premium remains unchanged, what is the new total required return on the stock?

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