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3) The betas of all stocks are available on Yahoo Finance. Pick any number between 3-5% as the risk-free rate of return FRF. The
3) The betas of all stocks are available on Yahoo Finance. Pick any number between 3-5% as the risk-free rate of return FRF. The market return M is 8%. Calculate the required rate of return on common equity in Firm A, Firm B, and a portfolio comprising both firms with different weights as follows: WA WB beta portfolio Required rate of return (CAPM) 0 100% 10% 90% 20% 80% 30% 70%
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