Asked Nov 5, 2019
Compute Bowling Avenue Inc.'s required rate of return given a beta of.9, risk free rate of 3.25%, and
the average market return of 9%.
х (
) =

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Compute Bowling Avenue Inc.'s required rate of return given a beta of.9, risk free rate of 3.25%, and the average market return of 9%. 5. х ( ) =


Expert Answer

Step 1

Calculation of required rate of return:


The required rate of return is 8.425%

Step 2

Meaning of required rate of return:

It is the minimum return that an investor would except from the company at a specified lev...


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Required rate of retum (R, ) = R, + B(R-R,)


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