zuber inc stock has a beta of 1.30, the risk free rate is 1.50% and the...

zuber inc stock has a beta of 1.30, the risk free rate is 1.50% and the market portfolio return is 9.0%. what is the firms required rate of return?

Expert Solution

Calculation of the required rate of return of Zuber Inc.

Formula,

Required rate of return = Risk free rate + beta x (Market return - Risk free rate)

= 1.50% + 1.30 x (9%-1.50)

= 1.50% + 1.30 x 7.50%

= 1.50% + 9.75%

= 11.25% (Answer)

jeff jeffy answered 3 years ago

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