number 12

12. QWN Corp. has a beta of 2.25 and is currently in equilibrium. The required rate of return on the stock is 14.5% versus a required return on an average stock of 10%. Now the required return on an average stock increases to 12%. Neither betas nor the risk-free rate change. What would QWN's new required return be? OA) 6.4% O B) 16.4% O C) 17.5% OD) 19% O E) None of the above