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Explain stock required rate of return

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Reference no: EM132853782

A stock has a required return of 9%, the risk free rate is 4.5%, and the market risk premium is 3 %.

a. What is the stock's beta?

b. If the market risk premium increased to 5%, what would happen to the stock's required rate of return?

Assume that the risk free rate and the beta remain unchanged.

Reference no: EM132853782

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