Corp Has a Beta of 1

question 70

Multiple Choice

Corp has a beta of 1.5 and is currently in equilibrium.The required rate of return on the stock is 12.00% versus a required return on an average stock of 10.00%.Now the required return on an average stock increases by 30.0% Neither betas nor the risk-free rate change.What would CCC's new required return be?

• A)14.89%
• B)15.68%
• C)16.50%
• D)17.33%
• E)18.19%

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Definitions:

Income Brackets

Categories defined by ranges of income levels, often used for statistical analysis and tax purpose.

Affiliations

Connections or associations with a group, organization, or individual based on shared interests or goals.

Car Colour

The hue or shades applied to the exterior of vehicles, often affecting their aesthetic appeal and sometimes insurance ratings or resale value.

Accident Likelihood

The probability or chance of an accident occurring in a given situation or environment.