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Calculate the required rate of return for food inc

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Reference no: EM132859068

Question a: Calculate the required rate of return for Food Inc. Assuming that (1) investors expect a 2% rate of inflation in the future, (2) the real risk-free rate is 3%, (3) the market portfolio return is 10%, (4) the firm has a beta of 1.2, and (5) its realized rate of return has averaged 11.0% over the last 5 years. (Hint: You will need to get the market premium first in the CAPM model).

Reference no: EM132859068

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