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5. Problem 8.11 (CAPM and Required Return) eBook Problem Walk-Through Calculate the required rate of return for Mudd Enterprises assuming that investors expect a 3.7%

5. Problem 8.11 (CAPM and Required Return) eBook Problem Walk-Through Calculate the required rate of return for Mudd Enterprises assuming that investors expect a 3.7% rate of inflation in the future. The real risk-free rate is 2.0%, and the market risk premium is 6.0%. Mudd has a beta of 2.2, and its realized rate of return has averaged 11.0% over the past 5 years. Round your answer to two decimal places. %

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