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Required Rate of Return 6% 13%, and As an equity analyst you are concerned with what will happen to the required return to Universal Toddler'

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Required Rate of Return 6% 13%, and As an equity analyst you are concerned with what will happen to the required return to Universal Toddler' stock as market conditions change. Suppose to but - 2.2 a. Under current conditions, what is rut, the required rate of return on UT Stock? Round your answer to two decimal places. 1. Now suppose rrf increases to 7%. The slope of the SML remains constant. How would this affect r and TUT? I. will increase by 1% and rut will remain the same. II. Both rm and run will decrease by 1%. III. Both rm and run will remain the same. IV. Both rm and run will increase by 1%. V. I will remain the same and rut will increase by 1%. -Select- 2 se rof decreases to 5%. The slope of the SML remains constant. How would this affect rm and nut? emain the same and nut will decrease by 1 %. TT Roth and nur will increase hv 1% 2. Now suppose TRF decreases to 5%. The slope of the SML remains constant. How would this affect rm and rut? I. I will remain the same and run will decrease by 1%. II. Both rm and run will increase by 1%. III. Both rm and run will remain the same. IV. Both rm and run will decrease by 1%. V. I will decrease by 1% and run will remain the same. -Select- herry remains at 6% but r increases to 15%. The slope of the SML does not remain constant. How we lecrease by 4.4%. 10 TUT m remain the same. 1. Now assume TRF remains at 6% but increases to 15%. The slope of the SML does not remain constant. How would these changes affect UT? I. TUT will decrease by 4.4%. II. TUT will remain the same. III. TUT will increase by 4.4%. -Select- e RF remains at 6% but I falls to 12%. The slope of the SML does not remain constant. How would these changes affect PUT? T. I will decrease hv 2.2% 2. Now assume the remains at 6% but I falls to 12%. The slope of the SML does not remain constant. How would these changes affect UT? 1. TUT Will decrease by 2.2%. II. TUT will remain the same. III. TUT will increase by 2.2%

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