Question
Data for Atwill Corporation is shown below. Now Atwill acquires some risky assets that cause its beta to increase by 30%. In addition, expected inflation
Data for Atwill Corporation is shown below. Now Atwill acquires some risky assets that cause its beta to increase by 30%. In addition, expected inflation increases by 2.00%. What is the stock's new required rate of return?
Initial beta 1.00
Initial required return (rs) 10.20%
Market risk premium, RPM 6.00%
Percentage increase in beta 20.00%
Increase in inflation premium, IP 3.00%
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Foundations Of Financial Management
Authors: Stanley B Block, Geoffrey A Hirt
12th Edition
0073295817, 9780073295817
