Use the security market line to determine the required rate of return for the following firm's...

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Use the security market line to determine the required rate of return for the following firm's...

Use the security market line to determine the required rate of return for the following firm's stock. The firm has a beta of 1.20, the required return in the market place is 10.00%, and the

riskminus−free

rate of return is 1.50%.

business finance

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Answer 1

Answer #1

As Per CAPM Rf Risk free return. Market return Required Return Rm Rf+Beta*(Rm-Rf) 0.0150+1.20*10.10-0.0150) 0.1170 11.70%

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Answer 2

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