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Calculate the required rate of return for Mars Inc.'s stock. The Mars beta is 1.2, the rate on a T-Bill is 4 percent, the

Calculate the required rate of return for Mars Inc.'s stock. The Mars beta is 1.2, the rate on a T-Bill is 4 percent, the rate on a long-term T-Bond is 6 percent, the required return on the market is 11.5 percent, the market has averaged a 14 percent annual return over the last six years, and Mars has averaged a 14.4 percent return over the past six years.

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SOLUTION The required rate of return for Mars Incs stock can be calculated using the Capital Asset Pricing Model CAPM Required Rate of Return RiskFree ... blur-text-image

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