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You are holding a stock which has a beta of 2.0 and is currently in equilibrium. The required return on the stock is 15 percent, and the return on an average stock is 10 percent. What would be the percentage change in the return on the stock, if the return on an average stock increased by 30 percent while the risk-free rate remained unchanged?
Government Subsidy
Financial assistance provided by the government to individuals, organizations, or industries to support their operation or reduce the price of their products.
Market Price
The current price at which an asset or service can be bought or sold in the market.
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The portion of income that is subject to taxation by a government, after all deductions and exemptions.
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The total amount of tax that businesses and individuals are legally obligated to pay to the tax authorities based on their income, assets, or transactions.
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