Data for Dana Industries Is Shown Below ?
A) 12

Multiple Choice

Data for Dana Industries is shown below.Now Dana acquires some risky assets that cause its beta to increase by 30.0%.In addition,expected inflation increases by 0.80%.What is the stock's new required rate of return? Do not round your intermediate calculations.

$\begin{array}{lr}\text { Initial beta } & 1.00 \\\text { Initial required return }\left(\mathrm{r}_{\mathrm{s}}\right) & 10.20 \% \\\text { Market risk premium, } \mathrm{RP}_{\mathrm{M}} & 6.00 \% \\\text { Percentage increase in beta } & 30.00 \% \\\text { Increase in inflation premium, IP } & 0.80 \%\end{array}$
?

A) 12.80%
B) 15.87%
C) 16.00%
D) 9.98%
E) 11.90%