Calculate the Required Rate of Return for Mars Inc

question 56

Multiple Choice

Calculate the required rate of return for Mars Inc.'s stock. The Mars's beta is 1.2, the rate on a T-bill is 4 percent, the rate on a long-term T-bond is 6 percent, the expected return on the market is 11.5 percent, the market has averaged a 14 percent annual return over the last six years, and Mars has averaged a 14.4 return over the last six years.

• A) 12.6%
• B) 13.2%
• C) 14.0%
• D) 15.6%
• E) 16.2%

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