Question
Porter plumbing's stock had a required return of 13.25% last year, when the risk-free rate was 5.50% and the market risk premium was 4.75%. Then
Porter plumbing's stock had a required return of 13.25% last year, when the risk-free rate was 5.50% and the market risk premium was 4.75%. Then an increase in investor risk aversion caused the market risk premium to rise by 2%. The risk free rate and the firm's beta remain unchanged. What is the company's new required rate of return?
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An Introduction To Socio-Finance
Authors: Jørgen Vitting Andersen, Andrzej Nowak
2013th Edition
3642419437, 978-3642419430
