Multiple Choice
Brodkey Shoes has a beta of 1.30, the T-bill rate is 3.00%, and the T-bond rate is 6.5%.The annual return on the stock market during the past 3 years was 15.00%, but investors expect the annual future stock market return to be 13.00%.Based on the SML, what is the firm's required return?
A) 13.51%
B) 13.86%
C) 14.21%
D) 14.58%
E) 14.95%
Correct Answer:
Verified
Correct Answer:
Verified
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