Data for Atwill Corporation Is Shown Below A) 1400%
B) 14

question 20

Multiple Choice

Data for Atwill Corporation is shown below.Now Atwill 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? $\begin{array}{lr}\text { Initial beta } & 1.00 \\\text { Initial required return }\left(\mathrm{r}_{\mathrm{s}}\right) & 10.20 \% \\\text { Market risk premium, RPM } & 6.00 \% \\\text { Percentage increase in beta } & 30.00 \% \\\text { Increase in inflation premium, IP } & 2.00 \%\end{array}$

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

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Definitions:

Social Factors

Elements within society, including cultural norms, education, and family influences, that impact an individual's behavior, attitudes, and opportunities.

Cultural Factors

The social, economic, and political aspects of a culture that influence individuals' behaviors, beliefs, and attitudes.

Erikson

Refers to Erik Erikson, a developmental psychologist and psychoanalyst known for his theory on the psychological development of human beings, identifying eight stages of human development.

Behaviorist Theory

A theory of learning which states that behaviors are learned from the environment through the processes of conditioning.