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A consumer products firm has a Beta of 1.0. Assume that the current risk-free rate of interest is 1.7%. Your finance professor has told you
A consumer products firm has a Beta of 1.0. Assume that the current risk-free rate of interest is 1.7%. Your finance professor has told you that an appropriate market risk premium is 5%. According to the Capital Asset Pricing Model (CAPM), what should be the required rate of return? When you input your answers, don't include the percent sign, i.e. write 7.3% as 7.3.
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