Yonan Corporation's Stock Had a Required Return of 11

question 7

Multiple Choice

Yonan Corporation's stock had a required return of 11.50% last year,when the risk-free rate was 5.50% and the market risk premium was 4.75%.Now suppose there is a shift in investor risk aversion,and the market risk premium increases by 2%.The risk-free rate and Yonan's beta remain unchanged.What is Yonan's new required return? (Hint: First calculate the beta,then find the required return.)

• A)14.03%
• B)14.38%
• C)14.74%
• D)15.10%

---

Definitions:

Negotiation

The process of discussing and reaching an agreement between two or more parties, each with its own interests and objectives.

Mediation

A confidential and voluntary process involving a neutral third party to help resolve disputes or conflicts.

Wrongful Dismissal

A lawsuit filed in a court by an employee alleging that he or she was dismissed without proper contractual or “reasonable” notice.

Reasonable Notice

The period of notice that an employer is legally required to give an employee before terminating their employment, or that an employee should give an employer before resigning.