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An analyst gathered the following information for a stock and market parameters: stock beta = 1.5;...

An analyst gathered the following information for a stock and market parameters: stock beta = 1.5; expected return on the Market = 9.4%; expected return on T-bills = 0.61%; and current stock Price = $21.15. What is this stock's required rate of return? (4 decimals - ex: 12.34% should be 0.1234)
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Answer #1

Required return Risk free return Market Return Rm Rf+Beta* (Rm-Rf) 0.61%+1.5*(9.4%-0.61%) 0.13795 13.80%

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