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please help multiple choice CMR has no debt. The stock's beta is 1.5 and its expected profitability, RE, is 15%. The company decides to go
please help multiple choice
CMR has no debt. The stock's beta is 1.5 and its expected profitability, RE, is 15%. The company decides to go into debt at the risk-free rate, Rf, of 5% to buy back 50% of its shares. Capital markets are supposed to be perfect.
Calculate the return required by shareholders following this redemption.
a) 15%
b)20%
c)25%
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