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Recently, the required rate of return on the Q share was determined to be 11%. In the analysis, it was determined that the risk-free rate
Recently, the required rate of return on the Q share was determined to be 11%. In the analysis, it was determined that the risk-free rate of return was 4% and that the required return on the market portfolio was 9%. Today, however, new information has been received indicating that the market risk premium is actually 1% higher than she had estimated in her original analysis. Based on this new information, what should be the required rate of return on the Q share?
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