The Risk-Free Rate of Return Is 5

question 113

Multiple Choice

The risk-free rate of return is 5.51 percent, based on an expected inflation premium of 2.54 percent.The expected return on the market is 12.8 percent.What is the required rate of return for Envoy common stock which has a beta of 1.35?

• A)6.98%
• B)16.24%
• C)15.35%
• D)12.80%

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