A Company Has a Beta of 3

question 40

Multiple Choice

A company has a beta of 3.75. If the market return is expected to be 20 percent and the risk-free rate is 9.5 percent, what is the company's required return?

• A) 33.250 percent
• B) 39.375 percent
• C) 48.875 percent
• D) 55.625 percent

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Definitions:

Budget Deficit

The financial situation in which a government's expenditures exceed its revenues within a given fiscal year, leading to borrowing or debt accumulation.

Gross National Debt

The total amount of money that a country's government has borrowed, including both the internal and external debt.

U.S. Debt

The total amount of money that the United States federal government owes to creditors, both domestic and international.

Government Spending

Expenses incurred by the government in the pursuit of its objectives, including spending on infrastructure, education, defense, and social services.