Mikkelson Corporation's Stock Had a Required Return of 12

question 55

Multiple Choice

Mikkelson Corporation's stock had a required return of 12.50% last year,when the risk-free rate was 3% and the market risk premium was 4.75%.Then an increase in investor risk aversion caused the market risk premium to rise by 2%.The risk-free rate and the firm's beta remain unchanged.What is the company's new required rate of return? (Hint: First calculate the beta,then find the required return. ) Do not round your intermediate calculations.

• A) 12.87%
• B) 16.50%
• C) 13.04%
• D) 12.71%
• E) 14.36%

---

Definitions:

Project Manager

A professional responsible for planning, executing, and closing projects, while managing the team and resources.

Temporary

Something that is not permanent and is intended or expected to last for a limited time.

Quality Failures

Occurrences when a product or service does not meet the established standards of quality.

Flowcharts

Graphic representations using symbols interconnected with lines to describe the steps in a process, decision-making pathways, or systems.