Zoro Corporation Has a Beta of 2

question 45

Multiple Choice

Zoro Corporation has a beta of 2.0. The risk-free rate of interest is 5%, and the return on the stock market overall is expected to be 13%. What is the required rate of return on Zoro stock?

• A) 21%.
• B) 41%.
• C) 16%.
• D) 13%.
• E) none of the above

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Definitions:

Asthma

A chronic respiratory condition marked by episodes of airway obstruction, causing wheezing, shortness of breath, chest tightness, and coughing.

Petroleum Gauze

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Chest Tube Insertion

A medical procedure where a tube is placed between the ribs into the pleural space to remove air, fluid, or pus.

Pulmonary Hypertension

A condition where the blood pressure in the arteries of the lungs is higher than normal, leading to increased strain on the heart.