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please answer a,b and c As an equity analyst you are concerned with what will happen to the required return to Universal Toddler Industres's stock
please answer a,b and c
As an equity analyst you are concerned with what will happen to the required return to Universal Toddler Industres's stock as martet conditions change. Suppove rRF=8%, rM=12%, and bUT=1.4 a) Under current conditions, what is rUT, the realred rate of returnon UTI stock? b) Now suppove rRF (1) increases to 9% or (2) decreases to 7%. The sope of the SML remains constant. How would this affect rM and rUTI ? C) Now assume rRF remains at 8% but rM(1) increaves to 15% or (2) falls to 10%. The slope of the SML does not remain constant. How would there changes affect rUTI Step by Step Solution
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