Zacher Co'S Stock Has a Beta of 1

question 19

Multiple Choice

Zacher Co.'s stock has a beta of 1.40, the risk-free rate is 4.25%, and the market risk premium is 5.50%.What is the firm's required rate of return?

• A) 11.36%
• B) 11.65%
• C) 11.95%
• D) 12.25%
• E) 12.55%

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Definitions:

SAS Proficiency

The level of skill and knowledge in using Statistical Analysis System (SAS) software for statistical analysis.

Statistical Software

Computer programs designed to perform statistical analysis, helping in data entry, manipulation, and presentation of results.

Two-way Table

A data organization method that displays frequencies or counts of variables in rows and columns, facilitating the examination of relationships between two categorical variables.

Null Hypothesis

A statistical hypothesis that assumes no effect or no difference between phenomena or populations.