A stock has a beta of 1.04, the expected return on the market is 10 percent, and the risk- free rate is 3.5 percent. What must the expected return on this stock be? (Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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A stock has a beta of 1.04, the expected return on the market is 10 percent, and the risk-
free rate is 3.5 percent. What must the expected return on this stock be? (Do not round
Intermediate calculations and enter your answer as a percent rounded to 2 decimal
places, e.g., 32.16.)
Transcribed Image Text:A stock has a beta of 1.04, the expected return on the market is 10 percent, and the risk- free rate is 3.5 percent. What must the expected return on this stock be? (Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
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