Question
CAPM: req. rate of return Please list all steps to solve - thanks! Mathys Corporation's stock had a required return of 9.60% last year, when
CAPM: req. rate of return
Please list all steps to solve - thanks!
Mathys Corporation's stock had a required return of 9.60% last year, when the risk-free rate was 3.00% and the market risk premium was 5.50%.Then an increase in investor risk aversion caused the market risk premium to rise by 1.50% from 5.50% to 7.00%.The risk-free rate and the firm's beta remain unchanged.What is the company's new required rate of return?
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Financial Management Core Concepts
Authors: Raymond M Brooks
3rd edition
133866696, 978-0133866698
