Calculate the required rate of return for Mercury Inc., assuming that investors expect a $1\mathrm{.}4$

percent rate of inflation in the future. The real risk$-$free rate is equal to $3\mathrm{.}9$ percent and the market

risk premium is $4\mathrm{.}4$ percent. Mercury has a beta of $0\mathrm{.}5,$ and its realized rate of return has

averaged $12$ percent over the last $5$ years.