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Stock A's stock has a beta of 1.30, and its required return is 11.00%. Stock B's beta is 0.80. If the risk-free rate is 4.75%,

Stock A's stock has a beta of 1.30, and its required return is 11.00%. Stock B's beta is 0.80. If the risk-free rate is 4.75%, what is the required rate of return on B's stock? (Hint: First find the market risk premium.)

Select the correct answer.

a. 8.64%

b. 8.68%

c. 8.60%

d. 8.72%

e. 8.76%

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