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How dofind what is the required rate of return on the stock

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Problem 1: A stock has a beta of 1.5. The pure rate of interest is 2.75 percent and investors require a 3 percent inflation premium. What is the required rate of return on this stock if the market risk premium is 6 percent? (Hint: First, calculate the risk-free rate using the pure rate and the inflation premium. Next, use this risk-free rate to find the required return on the stock.)

A. 16.5%
B. 15.7%
C. 14.8%
D. 12.9%
E. 17.4%
F. 13.7%

Reference no: EM132678815

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