What is the stocks new required rate of return

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Reference no: EM13915420

Data for Dana Industries is shown below. Now Dana acquires some risky assets that cause its beta to increase by 35%. In addition, expected inflation increases by 2.40%. What is the stock's new required rate of return?

Initial beta 1.00

Initial required return (rs) 10.20%

Market risk premium, RPM 6.00%

Percentage increase in beta 35.00%

Increase in inflation premium, IP 2.40%

Reference no: EM13915420

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