assume that Storches equity has a Beta of 1.1 the risk free rate is 2.7% and...

assume that Storches equity has a Beta of 1.1 the risk free rate is 2.7% and the market risk premium is 5%. According to the Capital Asset Pricing Model what should be the required rate of return?

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Expert Solution

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

Required rate of return = 0.027 + 1.1(0.05)

Required rate of return = 0.082 or 8.2%

jeff jeffy answered 2 years ago

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