Question: Utilizing the capital asset pricing model (CAPM), assess the required return and risk premium of King Audio stock if beta coefficient of the firm (i)

Utilizing the capital asset pricing model (CAPM), assess the required return and risk premium of King Audio stock if beta coefficient of the firm (i) is 1.25 and 1.6 respectively. (Hint: looking into the CAPM Scenario Table above to find out the market return (Rm) and the risk-free rate (Rf) first). What relationship you have observed on the required return and risk premium of King Audio if beta increase as expected?

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