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Engler Corporation's stock had a required return of 9 . 5 0 % last year when the risk - free rate was 2 . 5

Engler Corporation's stock had a required return of 9.50% last year when the risk-free rate was 2.50% and the market risk premium was 5.00%. Then an increase in investor risk aversion caused the market risk premium to rise by 1% from 5.00% to 6.00%. The risk-free rate and the firm's beta remain unchanged. What is the company's new required rate of return?
a.10.40%
b.10.90%
c.11.80%
d.12.50%
e.13.50%

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