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Company A has a beta of 0.80, while Company B's beta is 1.40. The required...

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Accounting

Company A has a beta of 0.80, while Company B's beta is 1.40. The required return on the stock market is 9.00%, and the risk-free rate is 2.00%. What is the difference between A's and B's required rates of return? (Hint: First find the market risk premium, then find the required returns on the stocks.) Do not round your intermediate calculations.

A

4.70%
B

4.00%
C

4.30%
D

4.20%
E

4.10%

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