Stock R has a beta of 1.5, Stock S has a beta of 0.85, the required return on an average stock is 9%, and the risk- free rate of return is 5%. By how much does the required return on the riskier stock exceed the required return on the less risky stock? Round your answer to two decimal places. %

Stock R has a beta of 1.5, Stock S has a beta of 0.85, the required return on an average stock is 9%, and the risk- free rate of return is 5%. By how much does the required return on the riskier stock exceed the required return on the less risky stock? Round your answer to two decimal places. %

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 12P: Stock R has a beta of 1.5, Stock S has a beta of 0.75, the expected rate of return on an average...

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Stock R has a beta of 1.5, Stock S has a beta of 0.85, the required return on an average stock is 9%, and the risk-
free rate of return is 5%. By how much does the required return on the riskier stock exceed the required return on
the less risky stock? Round your answer to two decimal places.
%

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