Calculate the required rate of return for Mercury Inc., assuming that investors expect a $1\mathrm{.}5$ percent rate of inflation in the future. The real risk$-$free rate is equal to $3\mathrm{.}3$ percent and the market

risk premium is $1\mathrm{.}6$ percent. Mercury has a beta of $1\mathrm{.}6,$ and its realized rate of return has averaged $11$ percent over the last $5$ years.

$7\mathrm{.}36\%$

$7\mathrm{.}86\%$

$8\mathrm{.}86\%$

$8\mathrm{.}36\%$

$9\mathrm{.}36\%$