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Voffs Sports Holdings has a total investment of $1,000 million in five companies: Company Investment ($MM) Beta () A 50 0.40 B 100 0.70 C
Voffs Sports Holdings has a total investment of $1,000 million in five companies:
| Company | Investment ($MM) | Beta () |
| A | 50 | 0.40 |
| B | 100 | 0.70 |
| C | 150 | 1.00 |
| D | 300 | 1.40 |
| E | 400 | 1.60 |
| Total | 1,000 |
|
If the risk-free rate is 2% and the market risk premium is 8%, what is Boggs required rate of return? (Hint: Compute the portfolio beta and use the CAPM formula)
| 10.00% | ||
| 7.80% | ||
| 9.80% | ||
| 12.40% |
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