2. Acme Dynamite Company's common stock has a beta of 1.60. The expected return on the market is 9%, and the risk- free rate is 5%. What is the required return on Acme's common stock according to the (CAPM)? a) 11.4% b) 19.4% c) 17% d) 9%

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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2. Acme Dynamite Company's common stock has a beta of
1.60. The expected return on the market is 9%, and the risk-
free rate is 5%. What is the required return on Acme's
common stock according to the (CAPM)?
a) 11.4%
b) 19.4%
c) 17%
d) 9%
Transcribed Image Text:2. Acme Dynamite Company's common stock has a beta of 1.60. The expected return on the market is 9%, and the risk- free rate is 5%. What is the required return on Acme's common stock according to the (CAPM)? a) 11.4% b) 19.4% c) 17% d) 9%
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