Question
NB Enterprise has a beta of 1.5 and is currently in equilibrium. The required rate of return on the stock is 12.00% versus a required
NB Enterprise has a beta of 1.5 and is currently in equilibrium. The required rate of return on the stock is 12.00% versus a required return on an average stock of 10.00%. Now the required return on an average stock increases by 30.0% (not percentage points). Neither betas nor the risk-free rate change. What would NB's new required return be?
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Lessons In Corporate Finance
Authors: Paul Asquith, Lawrence A. Weiss
2nd Edition
1119537835, 978-1119537830
