The Consolidated Transfer Co. is an all-equity financed firm. The beta is .75, the market risk...
The Consolidated Transfer Co. is an all-equity financed firm. The beta is .75, the market risk premium is 7.78 percent and the risk-free rate is 3.84 percent. What is the expected return on Consolidated stock?
8.46%
9.54%
9.68%
6.80%
8.22%
Homework Answers
Required Rate of return = RIsk free rate + Beta of stock xMarket risk premium
Required rate of return = 3.84+0.75x7.78 = 9.68%
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