Questions $38$ and $39$ are related.

A stock had a required return of $12\mathrm{.}00\%$ last year, when the risk$-$free rate was $4\mathrm{.}10\%$ and the market risk

premium was $5\mathrm{.}25\%.$ What is the Beta on the stock? Round to $21$ decimals.

Answer:

With reference to question $37,$ assume changes in investor perceptions causes the market risk premium to rise

by $2\%$ with the risk$-$free rate decreasing $0\mathrm{.}40\%$ while the expected return on the market portfolio increases

$1\mathrm{.}60\%.$ The stock's beta remains unchanged. What is the company's new required rate of return? Enter the

answer as a percentage and round to $1$ basis point or $2$ decimals.

Answer: