DHF Company Has a Beta of 1

question 1

Multiple Choice

DHF 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%

---

Definitions:

Collective Resistance

The act of standing together to oppose or challenge authority, policies, or societal norms, often in the context of social movements.

Capitalism

An economic system based on the private ownership of the means of production and their operation for profit.

Socialism

An economic and political system where the means of production are owned and controlled by the public or the state, with the goal of distributing wealth and resources more evenly across society.

Global Commodity Chain

A worldwide network of production and distribution processes through which a product passes until it reaches the consumer.