Multiple Choice
Calculate the required rate of return for Climax Inc.,assuming that (1) investors expect a 4.0% rate of inflation in the future,(2) the real risk-free rate is 3.0%,(3) the market risk premium is 5.0%,(4) the firm has a beta of 1.00,and (5) its realized rate of return has averaged 15.0% over the last 5 years.
A) 10.29%
B) 10.83%
C) 11.40%
D) 12.00%
E) 12.60%
Correct Answer:
Verified
Correct Answer:
Verified
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