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Lennox Corporation's stock had a required return of 7.90% last year, when the risk-free rate was 2.50% and the market risk premium was 4.50%.Then an

Lennox Corporation's stock had a required return of 7.90% last year, when the risk-free rate was 2.50% and the market risk premium was 4.50%.Then an increase in investor risk aversion caused the market risk premium to rise by 1.25% from 4.50% to 5.75%. The risk-free rate and the firm's beta remain unchanged.What is the company's new required rate of return?

a.8.125%

b.8.375%

c.8.650%

d.9.100%

e.9.400%

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