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The beta of a firms stock is 1.27, the yield on 30-year T-Bond is 7%, and the market risk premium is 6%. a) What rate

The beta of a firms stock is 1.27, the yield on 30-year T-Bond is 7%, and the market risk premium is 6%. a) What rate of return would you require to earn on the stock? b) If the stock is expected to pay a return of 13.8%, should you invest in the stock? Why or why not?

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