If the beta of the stock increased to 190 what would be the


Suppose the risk free rate=6%, required return on the market =11% and the required return on the stock is 14%.

A. Please calculate beta of the stock from the information above.

B. If the beta of the stock increased to 1.90, what would be the stock’s new required rate of return? Why are the two returns not proportional, or are they?

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Financial Management: If the beta of the stock increased to 190 what would be the
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