Multiple Choice
DHF Company has a beta of 1.5 and is currently in equilibrium.The required rate of return on the stock is 12.00% versus a required return on an average stock of 10.00%.Now the required return on an average stock increases by 30.0% (not percentage points) .Neither betas nor the risk-free rate change.What would DHF's new required return be?
A) 14.89%
B) 15.68%
C) 16.50%
D) 17.33%
E) 18.19%
Correct Answer:
Verified
Correct Answer:
Verified
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