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Solve all questions please. show working B. Assume a company has a beta of 1.20. The market risk premium is 8 percent and the risk-free
Solve all questions please. show working
B. Assume a company has a beta of 1.20. The market risk premium is 8 percent and the risk-free rate of return is 4 percent. Required: i. Compute the required rate of return of the company 2 marks ii. Compute the risk premium on the company's common stock 2 marks C. Assume the T/bills are generating a return of 5 percent. The return on the Ghana Stock Exchange Index (GSEI) is 15 percent. Company A's return are 15 percent less volatile than the market. Required: Calculate the required rate of return of company A's stock. 3 marks D. The stock market is expected to generate an 11 percent return. The standard deviation of the market return in 15 percent. A listed company's returns are consistently 20 percent more volatile than the market and the risk-free rate is 4 percent. Required: Calculate the required rate of return of the company. 3 marksStep by Step Solution
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