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The beta of company As stock is estimated to be 1.2 according to the regression analysis. Assume that the prevailing risk-free rate is 6 percent,

The beta of company A’s stock is estimated to be 1.2 according to the regression analysis. Assume that the prevailing risk-free rate is 6 percent, and the market risk premium is estimated to be 7 percent based on historical data. What is the required rate of return on company A’s stock?

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