Zelo, Inc. stock has a beta of 1.23. The risk-free rate of return is 4.5% and the

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Zelo, Inc. stock has a beta of 1.23. The risk-free rate of return is 4.5% and the market rate of return is 10%. What is the amount of the risk premium on Zelo stock?

A. 4.47%

B. 5.50%

C. 5.54%

D. 6.77%

E. 12.30%

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Corporate Finance A Focused Approach

ISBN: 978-1305637108

6th edition

Authors: Michael C. Ehrhardt, Eugene F. Brigham

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Question Posted: May 23, 2013 04:45 AM

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Zelo, Inc. stock has a beta of 1.23. The risk-free rate of return is 4.5% and the

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Corporate Finance A Focused Approach

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