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need help with the graph Value 4.0% 6.0% CAPM Elements Risk-free rate (RF) Market risk premium (RPM) Happy Corp. stock's beta Required rate of return
need help with the graph
Value 4.0% 6.0% CAPM Elements Risk-free rate (RF) Market risk premium (RPM) Happy Corp. stock's beta Required rate of return on Happy Corp. stock | | 0.6 7.6% | An analyst believes that inflation is going to increase by 2.0% over the next year, while the market risk premium will be unchanged. The analyst uses the Capital Asset Pricing Model (CAPM). The following graph plots the current SML Calculate Happy Corp.'s new required return. Then, on the graph, use the green points (rectangle symbols) to plot the new SML suggested by this analyst's prediction. Happy Corp.'s new required rate of return is Tool tip: Mouse over the points on the graph to see their coordinates. 9.6% REQUIRED RATE OF RETURN Percent) New SML 18 12 0.0 0.4 0.8 1.2 1.8 2.0 RISK IBetalStep by Step Solution
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