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Determine what is the required rate of return on b stock

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Question 1: Stock A's stock has a beta of 1.30, and its required return is 16.00%. Stock B's beta is 0.80. If the risk-free rate is 4.75%, what is the required rate of return on B's stock? (Hint: First find the market risk premium.)

Select the correct answer.

a. 11.55%

b. 11.59%

c. 11.67%

d. 11.63%

e. 11.71%

Reference no: EM132494388

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