If ABC's beta = 1.4, the market risk premium is 5% and Tbills yield 2%, what...

Question

Question

If ABC's beta = 1.4, the market risk premium is 5% and Tbills yield 2%, what return are ABC stockholder's demanding?

business finance

Answer 1

Answer #1

Required return=risk free rate+beta*market risk premium

=2+(1.4*5)

which is equal to

=9%

Answer 2

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