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Company A has a beta of 0.80, while Company B's beta is 1.40. The required return on the stock market is 9.00%, and the risk-free

Company A has a beta of 0.80, while Company B's beta is 1.40. The required return on the stock market is 9.00%, and the risk-free rate is 2.25%. What is the difference between A's and B's required rates of return? (Hint: First find the market risk premium, then find the required returns on the stocks.) Do not round your intermediate calculations.

A

4.70%
B

4.05%
C

5.06%
D

5.00%
E

4.35%

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