Question
Warp-O Corporation common stock has a market price of $45 per share. Warp-O has a beta of 1.4. The rate of return on Treasury bonds
Warp-O Corporation common stock has a market price of $45 per share. Warp-O has a beta of 1.4. The rate of return on Treasury bonds is currently 6% and the return on the S&P 500 is 13%. What is the required rate of return on Warp-O common stock?
a) 10.2%
b) 24.2%
c) 13.0%
d) 35.1%
e) 15.8%
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