DHF Company Has a Beta of 1

question 1

Multiple Choice

DHF Company has a beta of 1.5 and is currently in equilibrium.The required rate of return on the stock is 12.00% versus a required return on an average stock of 10.00%.Now the required return on an average stock increases by 30.0% (not percentage points) .Neither betas nor the risk-free rate change.What would DHF's new required return be?

• A) 14.89%
• B) 15.68%
• C) 16.50%
• D) 17.33%
• E) 18.19%

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Definitions:

Sentencing Circles

A restorative justice practice that involves community members in the sentencing process, aiming to rehabilitate the offender and heal the community.

Criminal Justice System

A structure established by governments to enforce the law, adjudicate offenders, and ensure the administration of justice.

Juror Impartiality

The principle that jurors should be unbiased and not influenced by personal feelings, opinions, or prejudice in making decisions or during legal proceedings.

Bias

A prejudice in favor of or against one thing, person, or group compared with another, usually in a way considered to be unfair.