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Consider the Information Below for Postman Builders Inc \quad

question 14

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Consider the information below for Postman Builders Inc. Suppose that the expected inflation rate and thus the inflation premium increase by 2.0 percentage points, and Postman acquires risky assets that increase its beta by the indicated percentage. What is the firm's new required rate of return?
beta: \quad \quad \quad \quad \quad \quad \quad 1.50\quad 1.50
Recquired return (r5) \left( r _ { 5 } \right) \quad \quad 10.20%\quad10.20 \%
RPM: \quad \quad \quad \quad \quad \quad 6.00%\quad6.00 \%
Percentage increase in beta: 20%\quad 20 \%


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