c. risk-free rate increases to 5%

The risk-free rate is 38 and the market risk premium is 7 percent. HSU stock beta is 0.6 and expected return is 118. a. Find the required return for HSU b. Comparing, expected and required return, is the stock over- , under-, or correctly valued? c. Now suppose that the increases to 5 %. The slope of the SML remains constant. Find the new required return for HSU. The risk-free rate is 5 percent and the expected return on the market portfolio is 13 percent. Smith Imports is in equilibrium at 11 percent. Determine Smith Imports beta coefficient