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A company's stock had a required return of 14.75% last year, when the risk-free rate was 3.0% and the market risk premium was 8.50%.
A company's stock had a required return of 14.75% last year, when the risk-free rate was 3.0% and the market risk premium was 8.50%. Now suppose there is a shift in investor risk aversion, and the market risk premium increases by 1%. The risk-free rate and the beta remain unchanged. What is this company's new required return?
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Microeconomics An Intuitive Approach with Calculus
Authors: Thomas Nechyba
1st edition
538453257, 978-0538453257
