Mikkelson Corporation's Stock Had a Required Return of 11

question 133

Multiple Choice

Mikkelson Corporation's stock had a required return of 11.75% last year,when the risk-free rate was 5.50% and the market risk premium was 4.75%.Then an increase in investor risk aversion caused the market risk premium to rise by 2%.The risk-free rate and the firm's beta remain unchanged.What is the company's new required rate of return? (Hint: First calculate the beta,then find the required return.)

• A)14.38%
• B)14.74%
• C)15.11%
• D)15.49%
• E)15.87%

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Definitions:

Sacraments

Sacred religious rites recognized as means of divine grace, such as baptism and communion, in Christian theology.

Spiritual Needs

The intrinsic human quest for meaning, purpose, and connection to something greater than oneself, which can be crucial for well-being.

Decisional Conflict

The psychological state of uncertainty and indecision faced by individuals when making complex decisions, especially when the choices involve risk, loss, or challenge to personal values.

Impaired Religiosity

A difficulty in exercising or expressing one's beliefs and rituals in a religious community.