Answered: AA Corporation's stock has a beta of…

AA Corporation's stock has a beta of 1.2. The risk-free rate is 3.75% and the expected return on the market is 12.92%. What is the required rate of return on AA's stock?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter2: Risk And Return: Part I

Section: Chapter Questions

Problem 4P: An analyst has modeled the stock of a company using the Fama-French three-factor model. The market...

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Question

Financial Accounting

AA Corporation's stock has a beta of 1.2. The risk-free
rate is 3.75% and the expected return on the market
is 12.92%.
What is the required rate of return on AA's stock?

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