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The stock of Pizza Hot Inc., a Mexican pizza chain, has an estimated beta of $1\mathrm{.}6.$ Calculate the required rate of return on Pizza Hot's stock if the SML is estimated as follows:

$k_j=0\mathrm{.}08+0\mathrm{.}094{}_j$

based on

a$.$ An initial inflation expectation of $3$ percent. Round your answer to one decimal place.

$\%$

b$.$ A new inflation expectation of $4$ percent. Round your answer to one decimal place.

$\%$

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