INTERMEDIATE FINANCIAL MGMT.-W/MINDTAP
INTERMEDIATE FINANCIAL MGMT.-W/MINDTAP
14th Edition
ISBN: 9780357533598
Author: Brigham
Publisher: CENGAGE L
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Chapter 2, Problem 2P

AA Corporation’s stock has a beta of 0.8. The risk-free rate is 4%, and the expected return on the market is 12%. What is the required rate of return on AA’s stock?

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AA Corporation’s stock has a beta of 0.8. The risk-free rate is 4%, and theexpected return on the market is 12%. What is the required rate of return onAA’s stock?
Assume that the risk-free rate is 3.5% andthe market risk premium is 4%. What is the required return for the overall stock market?What is the required rate of return on a stock with a beta of 0.8?
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