Zacher Co'S Stock Has a Beta of 1

question 19

Multiple Choice

Zacher Co.'s stock has a beta of 1.40, the risk-free rate is 4.25%, and the market risk premium is 5.50%.What is the firm's required rate of return?

• A) 11.36%
• B) 11.65%
• C) 11.95%
• D) 12.25%
• E) 12.55%

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Definitions:

Solicitor

A legal professional qualified to offer advice and represent clients in legal matters, primarily in jurisdictions such as the UK, Ireland, and Australia.

Chain-Of-Command

The hierarchy within an organization that establishes who is in charge of whom and of whom permission must be asked.

Status Generalization

The process by which attributes of individuals, unrelated to a particular situation, influence the formation of status hierarchies within groups.

Biased

Having a predisposition or prejudice towards or against something or someone, often in a way considered to be unfair.