What is the beta of the stock

Reference no: EM131795777

Problem: Beta and required rate of return

- A stock has a required return of 10%; the risk-free rate is 4.5%; and the market risk premium is 3%.

- What is the stock's beta? Round your answer to two decimal places.

- If the market risk premium increased to 7%, what would happen to the stock's required rate of return? Assume that the risk-free rate and the beta remain unchanged.

- If the stock's beta is greater than 1.0, then the change in required rate of return will be less than the change in the market risk premium.

- If the stock's beta is equal to 1.0, then the change in required rate of return will be greater than the change in the market risk premium.

- If the stock's beta is equal to 1.0, then the change in required rate of return will be less than the change in the market risk premium.

- If the stock's beta is greater than 1.0, then the change in required rate of return will be greater than the change in the market risk premium.

- If the stock's beta is less than 1.0, then the change in required rate of return will be greater than the change in the market risk premium.

- New stock's required rate of return will be %. Round your answer to two decimal places.

Reference no: EM131795777

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