Company Has a Beta of 1

question 48

Multiple Choice

Company has a beta of 1.5 and is currently in equilibrium The required rate of return on the stock is 12.00% versus a required return on an average stock of 10.00% Now the required return on an average stock increases by 30.0% (not percentage points) Neither betas nor the risk-free rate change What would DHF's new required return be?

• A) 14.89%
• B) 15.68%
• C) 16.50%
• D) 17.33%
• E) 18.19%

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A person who operates their own business or works as an independent contractor, responsible for their own taxes and oftentimes their own schedule and work processes.