CAPM AND REQUIRED RETURN
Calculate the required rate of return for Mudd Enterprises assuming that investors expect a 4.1% rate of inflation in the future. The real risk-free rate is 3%, and the market risk premium is 7.5%. Mudd has a beta of 1.5, and its realized rate of return has averaged 11% over the past 5 years. Round your answer to two decimal places.
Answer
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