Investors expect the annual future stock market return

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Reference no: EM13848295

Brodkey Shoes has a beta of 1.10, the T-bond rate is 5.5%. The annual return on the stock market during the past 3 years was 15.00%, but investors expect the annual future stock market return to be 14.00%. Based on the SML, what is the firm's required return?

a. 13.51%

b. 13.86%

c. 14.21%

d. 14.85%

e. 14.95%

Reference no: EM13848295

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