Find the Required Rate of Return for Equity Investors of a Firm

question 53

Multiple Choice

Find the required rate of return for equity investors of a firm with a beta of 1.3 when the risk free rate is 5%,the market risk premium is 5%,and the return on the market is 10%.

• A) 11.5%
• B) 13.0%
• C) 16.5%
• D) 18.0%

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Definitions:

Breeder Reactor

A nuclear reactor designed to produce more fissile material than it consumes, typically using uranium-238 or thorium-232.

Coolant

A substance, typically a liquid or gas, used to reduce or regulate the temperature of a system or component.

Plutonium

A radioactive chemical element used as fuel in nuclear power plants and in the manufacture of nuclear weapons.

Nitrogen

A chemical element with symbol N and atomic number 7, making up 78% of the Earth's atmosphere by volume; it is a vital component of amino acids, proteins, and nucleic acids.