1 Take Home Burrows & Johnson Ltd. an investment management firm, is reviewing Roker Fisheries Corporation (RFC), which has 4 subsidiaries. Research has provided company and market information in the table below: % of Capital Invested Subsidiary Beta Seafood 60 0.70 Real Estate 25 0.90 Solar energy 1000 1.30 Water Manufacturing 5 1.50 sto Risk Free Rate 6% CO Market Return 11% A B What is RFC's beta? 2 What is RFCs required rate of return? 2 C Burrows & Johnson Ltd. have recommended a shift in strategic focus; to decrease RFC reliance on Seafood, so the percentage of capital in this subsidiary will be reduced 40%. And increase the percentage in Water Manufacturing to 25%. What will RFC's required rate of return be after these changes? 4