Calculate the required rate of return

Reference no: EM131954875

Question: CAPM and required return

Calculate the required rate of return for Mudd Enterprises assuming that investors expect a 4.1% rate of inflation in the future. The real risk-free rate is 1.5%, and the market risk premium is 3%. Mudd has a beta of 1.7, and its realized rate of return has averaged 14% over the past 5 years. Round your answer to two decimal places.

Reference no: EM131954875

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