Data for Atwill Corporation is shown below. Now Atwill acquires
some risky assets that cause its...
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Finance
Data for Atwill Corporation is shown below. Now Atwill acquiressome risky assets that cause its beta to increase by 30%. Inaddition, expected inflation increases by 2.00%. What is thestock'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
30.00%
Increase in inflation premium, IP
2.00%
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