Historically, DeSoto projects have had an average beta of 1.25, which indicates the higher risk levels for the firm. Assuming the market risk premium (MRP) currently estimated to be 8.0% and the risk- free rate is 1.75%, what is the required return for an "average" DeSoto project using based or its average project beta? Show the average required return to 2 decimal places.

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Market Efficiency

Market efficiency refers to the market's ability to provide investors with all available information about investment options for buying and selling securities. Market efficiency reflects the true value of securities without undervaluing or overvaluing them. When the quality and quantity of information increase, the market becomes more efficient, allowing it to reduce arbitrage and obtain higher market returns from investment. In a well-functioning market, everyone receives all information completely and immediately at no cost. It opens up a plethora of opportunities for investors to access various investment options.