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What rate of return does laura expect on her investment

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The Rock Co. has both equity and debt trading in the markets. The market value of the equity is $ 50 million and the market value of debt is $ 6 million. The debt is risk free and the equity has a beta of 1.4. The risk free rate is 3.5% and the market risk premium is 6%. There are no taxes. The Rock Co. is considering expanding its business. Laura is an equity investor considering an investment in the Rock Co.. What rate of return does Laura expect on her investment?

Reference no: EM132459135

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