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Data for Dana Industries is shown below. Now Dana acquires some risky assets that cause its beta to increase by 40.0%. In addition, expected inflation
Data for Dana Industries is shown below. Now Dana acquires some risky assets that cause its beta to increase by 40.0%. In addition, expected inflation increases by 1.00 percentage points. What is the stock's new required rate of return? Do not round your intermediate calculations. Initial beta 1.00 11.20% 6.00% Initial required return (rs) Market risk premium, RPM Percentage increase in beta Increase in inflation premium, IP 40.00% 1.00% a. 14.60% b. 12.20% C. 15.00% d. 13.60% e. 14.28%
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