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Data for Dana Industries is shown below. Now Dana acquires some-(Answered)

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Data for Dana Industries is shown below. Now Dana acquires some risky assets that cause its beta to increase by 30%. In addition, expected inflation increases by 2.00%. What is the stock's new required rate of return?

Initial beta 1.00

Initial required return (rs) 10.20%

Market risk premium, RPM 6.00%

Percentage increase in beta 30.00%

Increase in inflation premium, IP 2.00%

 

Paper#9209214 | Written in 27-Jul-2016

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