Question
Data for Dana Industries is shown below. Now Dana acquires some risky assets that cause its beta to increase by 45.0%. In addition, expected inflation
Data for Dana Industries is shown below. Now Dana acquires some risky assets that cause its beta to increase by 45.0%. In addition, expected inflation increases by 2.00 percentage points. What is the stock's new required rate of return? Do not round your intermediate calculations.
| Initial beta | 1.00 |
| Initial required return (rs) | 9.00% |
| Market risk premium, RPM | 6.00% |
| Percentage increase in beta | 45.00% |
| Increase in inflation premium, IP | 2.00% |
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Technology And Finance Challenges For Financial Markets Business Strategies And Policy Makers
Authors: Morten Balling, Frank Lierman, Andy Mullineux
1st Edition
041529827X, 978-0415298278
