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Sun TV has a beta of 1.2 and is currently in equilibrium. The required rate of return on the stock is 14.00% versus a required

Sun TV has a beta of 1.2 and is currently in equilibrium. The required rate of return on the stock is 14.00% versus a required return on an average stock of 12.00%. Now the required return on an average stock increases by 40.0% (not percentage points). Neither betas nor the risk-free rate change. What would Sun TVs new required return be?

16.154%

18.86%

14.33%

17.50%

13.71%

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