Solved: Required rate of return for rate of inflation in future, Finance Basics

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Required rate of return for rate of inflation in future

Question:

Calculate the required rate of return assuming that investors expect a 5 % rate of inflation in the future. The real risk free rate is = to 3% and the market risk premium is 5 %. The company has a beta of 2.0 and its realized rate of return has averaged 15 % over the last 5 years.

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Finance Basics: Required rate of return for rate of inflation in future

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