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A stock you are holding has a beta of 2.0 and the stock is currently in equilibrium. The required rate of return on the stock
A stock you are holding has a beta of 2.0 and the stock is currently in equilibrium. The required rate of return on the stock is 15% versus a required return on an average stock of 10%. Now the required return on an average stock increases by 12.5% (not percentage points). The risk-free rate is unchanged. By what percentage (not percentage points) would the required return on your stock increase as a result of this event? Select the correct answer. a. 16.53% b. 16.81% c. 16.60% d. 16.67% e. 16.74%
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