Data for Atwill Corporation Is Shown Below

question 83

Multiple Choice

Data for Atwill Corporation is shown below.Now Atwill acquires some risky assets that cause its beta to increase by 30%.In addition,expected inflation increases by 2.00%.What is the stock's new required rate of return?
Initial beta
1) 00
Initial required return (r_s)
10) 20%
Market risk premium,RP_M
6) 00%
Percentage increase in beta
30) 00%
Increase in inflation premium,IP
2) 00%

• A) 14.00%
• B) 14.70%
• C) 15.44%
• D) 16.21%
• E) 17.02%

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