Olson Corporation Has a Beta Coefficient of 1

question 13

Multiple Choice

Olson Corporation has a beta coefficient of 1.5 at a debt/assets ratio equal to 40 percent. The risk-free rate of return, rRF, is 5 percent and the market return, rM, is 9 percent. Based on the capital asset pricing model (CAPM) , what is Olson's required rate of return on its common equity?

• A)18.5%
• B)13.5%
• C)11.0%
• D)15.0%
• E)6.0%

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Definitions:

Conscious Marketing

Marketing practices that recognize the broader impacts of actions on customers, society, and the environment, and that prioritize sustainability and ethical concerns.

Strategic Marketing Planning Process

A systematic approach to defining marketing strategies and plans that can contribute to the long-term goals and competitiveness of a business.

Managers

Individuals within an organization responsible for directing and overseeing the work of others to achieve the organization's goals and objectives.

Conscious Marketing

A marketing philosophy that prioritizes ethical considerations, sustainability, and the social impact of marketing activities.