The Consolidated Transfer Co. is an all-equity financed firm. The beta is .75, the market risk premium

Question:

The Consolidated Transfer Co. is an all-equity financed firm. The beta is .75, the market risk premium is 8% and the risk-free rate is 4%. What is the expected return of Consolidated?

A. 7%

B. 8%

C. 9%

D. 10%

E. 13%

Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...