Tiger Corp's stock had a required return of 11.75% last year, when the risk-free rate was 4.50% and the market risk premium was 5.00%. Then an increase in investor risk aversion caused the market risk premium to rise by 1.00%. The risk-free rate and the firm's beta remain unchanged. What is the company's new required rate of return? (Hint: First calculate the beta, then find the required return.) 13.56% 13.20% 14.38% 15.12% 16.69%

Tiger Corp's stock had a required return of 11.75% last year, when the risk-free rate was 4.50% and the market risk premium was 5.00%. Then an increase in investor risk aversion caused the market risk premium to rise by 1.00%. The risk-free rate and the firm's beta remain unchanged. What is the company's new required rate of return? (Hint: First calculate the beta, then find the required return.) 13.56% 13.20% 14.38% 15.12% 16.69%

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 7P

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