Rodriguez Roofing's Stock Has a Beta of 1

question 33

Multiple Choice

Rodriguez Roofing's stock has a beta of 1.23,its required return is 11.25%,and the risk-free rate is 4.30%.What is the required rate of return on the stock market? (Hint: First find the market risk premium.)

• A)9.95%
• B)10.20%
• C)10.45%
• D)10.72%

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Definitions:

Programmed Decisions

Decisions made using a rule, policy, or procedure for routine or repetitive problems that have been encountered before.

Customer Relations

The management and development of interaction between a business and its customers to improve satisfaction and loyalty.

Programmed Decisions

Decisions that are routine and repetitive, which can be addressed through established processes.

Company Policies

Established guidelines and rules that dictate how various aspects of business should be conducted within an organization.