For Dana Industries Is Shown Below A)1400%
B)14

question 14

Multiple Choice

for Dana Industries is shown below.Now Dana acquires some risky assets that cause its beta to increase by 30%.In addition, expected inflation increases by 2.00%.What is the stock's new required rate of return?
$$\begin{array}{l}\begin{array} { | l | l | } \hline \text { Initial beta } & 1.00 \\\hline \text { Initial required return } \left( \mathrm { r } _ { \mathrm { s } } \right) & 10.20 \% \\\hline \text { Market risk premium, RPM } & 6.00 \% \\\hline \text { Percentage increase in beta } & 30.00 \% \\\hline \text { Increase in inflation premium, IP } & 2.00 \% \\\hline & \\\hline\end{array}\\\begin{array} { | l | l | l | } \hline 1 . && 14.00 \% \\\hline 2 . && 14.70 \% \\\hline 3 . && 15.44 \% \\\hline 4 . && 16.21 \% \\\hline 5 . && 17.02 \% \\\hline\end{array}\end{array}$$

• A)14.00%
• B)14.70%
• C)15.44%
• D)16.21%
• E)17.02%

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Definitions:

Amygdala

A section of the brain's limbic system involved in emotion, particularly fear and pleasure, influencing behavior and decision-making.

Lateral Hypothalamus

An area of the brain thought to control hunger and thirst by regulating the release of various neurotransmitters and influencing eating behavior.

Frontal Lobe

The part of the brain located at the front of each cerebral hemisphere, involved in decision making, problem solving, and controlling behavior and emotions.

False Dichotomy

A logical fallacy involving the presentation of two opposing options as the only possibilities, when in fact more options exist.