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3. Suppose the current market Risk-Rree Rate is equal to 1.25% and that the required Return on the Market is 8.50%. What is the Required
3. Suppose the current market Risk-Rree Rate is equal to 1.25% and that the required Return on the Market is 8.50%. What is the Required Rate of Return for the stock/equity of the following two companies? Risk-Free Rate Req. Return on Market Market Risk Premium 1.25% 8.50% 7.25% Required Return A. FGH stock with a Beta = 0.85? Required Return B. XYZ stock with a Beta = 1.35? C. If the Required Return on the Market increases to 10%, then what is the new Required Rate of Return for FGH stock? Required Return
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