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The following graph plots the current security market line (SML) and indicates the return that investors require from holding stock from Happy Corp. (HC). Based

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The following graph plots the current security market line (SML) and indicates the return that investors require from holding stock from Happy Corp. (HC). Based on the graph, complete the table that follows: 200 160 120 REQUIRED RATE OF RETURN (Percent) 10 Return on HC's Stock 10 0 15 20 0.5 1.0 RISK (Beta) CAPM Elements Value Risk-free rate (TRF) 4.0% Market risk premium (RPM) Happy Corp. stock's beta 6.0% Required rate of return on Happy Corp. stock 7.8% An analyst believes that inflation is going to increa the Capital Asset Pricing Model (CAPM). The follow Calculate Happy Corp's new required return. Then analyst's prediction 10.8% over the next year, while the market risk premium will be unchanged. The analyst uses plots the current SML Jraph, use the green points (rectangle symbols) to plot the new SML suggested by this 4.5% Happy Corp.'s new required rate of return is

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