Fusilli Jerry Corp's common stock has a beta of 1.30. If the risk free rate of...

Fusilli Jerry Corp's common stock has a beta of 1.30. If the risk free rate of return is expected to be 4% and the market risk premium is 10%, what is the required return on Fusilli Jerry Corp's common stock?

53.00

17.00

74.20

22.20

Expert Solution

Required return = Risk free rate + Beta(Market risk premium)

Required return = 0.04 + 1.30(0.10)

Required return = 0.1700 or 17.00%

jeff jeffy answered 3 years ago

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