Question: Problem 8-11 CAPM and required return Calculate the required rate of return for Mudd Enterprises assuming that investors expect a 4.1% rate of inflation in

Problem 8-11 CAPM and required return

Calculate the required rate of return for Mudd Enterprises assuming that investors expect a 4.1% rate of inflation in the future. The real risk-free rate is 1%, and the market risk premium is 3%. Mudd has a beta of 1.6, and its realized rate of return has averaged 9% over the past 5 years. Round your answer to two decimal places.

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