Multiple Choice
Company A has a beta of 0.70,while Company B's beta is 1.45.The required return on the stock market is 9.00%,and the risk-free rate is 2.25%.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) 5.06%
B) 5.01%
C) 4.71%
D) 4.30%
E) 4.25%
Correct Answer:
Verified
Correct Answer:
Verified
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