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Walmart has a stock beta of 0.8, and the current inflation rate is 4%. The shares are trading at $102.50, and the average return on

Walmart has a stock beta of 0.8, and the current inflation rate is 4%. The shares are trading at $102.50, and the average return on the stock market is 8%. If the t-bill rate is 3%, what is the expected return on Walmart shares?

The correct answer should be 7%.

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