Problem:
Alpha stock has a beta of 1.23, its required return is 11.75%, and the risk-free rate is4.30%.
Required:
Question: What is the required rate of return on the market? (Hint: First find the market risk premium.) Answer
- 10.36%
- 10.62%
- 10.88%
- 11.15%
- 11.43%
Note: Please explain comprehensively and give step by step solution.