What is the required return on asset with beta

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Reference no: EM132041242

1. Reactive Power Generation has the following capital structure. Its corporate tax rate is 40%. Security Market Value Required Rate of Return Debt $ 20 million 4 % Preferred stock 20 million 6 Common stock 40 million 10 What is its WACC?

2. The risk-free rate is 3.50%, and the required return on the stock market is 12%. (1) What is the required return on an asset with a beta of 0.80? (2) What is the reward/risk ratio? (3) What is the required return on a portfolio consisting of 30% of the asset above and the rest in an asset with an average amount of systematic risk?

Reference no: EM132041242

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