A stock has an expected return of 11.5 percent, the risk-free rate is 3.2 percent, and the market risk premium is 7 percent. What must the beta of this stock be?

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter2: Risk And Return: Part I
Section: Chapter Questions
Problem 12P: Stock R has a beta of 1.5, Stock S has a beta of 0.75, the expected rate of return on an average...
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  1. A stock has an expected return of 11.5 percent, the risk-free rate is 3.2 percent, and the market risk premium is 7 percent. What must the beta of this stock be?
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