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Instructions: You are required to use a financial calculator orspreadsheet (Excel) to solve the problems (provided on page 4)related to risk and return characteristics and stock/bondvaluation. You are required to show the following three steps foreach problem (sample problems and solutions are provided forguidance):(i) Describe and interpret the assumptions related to theproblem.(ii) Apply the appropriate mathematical model to solve theproblem.(iii) Calculate the correct solution to the problem.A company’s stock had a required return of 11.50% last year,when the risk-free rate was 5.50% and the market risk premium was4.75%. Now, suppose there is a shift in investor risk aversion, andthe market risk premium increases by 2.00%. The risk-free rate andthe beta remain unchanged. What is this company’s new requiredreturn (round your answer to two decimal places)?