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Firlakuza [10]
3 years ago
13

Cooley company's stock has a beta of 1.32, the risk-free rate is 4.25%, and the market risk premium is 5.50%. what is the firm's

required rate of return?
Business
1 answer:
balu736 [363]3 years ago
6 0
11.51%

The required rate of return = risk-free rate + Beta * (market risk premium)

Here, we multiply the beta of 1.32 times the market risk premium of 5.50%, then add the risk-free rate of 4.25% to get the required rate of return, or 11.51%. 
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