Hefty Stock Has a Beta of 1

question 26

Multiple Choice

Hefty stock has a beta of 1.2. If the risk-free rate is 7% and the market risk premium is 6.5%, what is the required rate of return on Hefty?

• A) 14.8%
• B) 14.4%
• C) 12.4%
• D) 13.5%

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Definitions:

Product Line Visibility

Refers to the degree to which a company's range of products is recognized and understood by customers.

Direct Contact

The immediate interaction between individuals, without the interference of any medium, enabling clear and direct communication or transfer of information.

Developing Leaders

The process of enhancing an individual's ability to guide, influence, and motivate others to achieve organizational goals.

Functional Design

A design approach focused on creating products, systems, or structures based on their intended function or purpose.