TechPro Inc. stock has a beta of 1.20 and its required return is 14%. Greenfield Corp.'s stock has a beta of 0.95. If the risk-free rate is 5%, what is the required rate of return on Greenfield's stock? Show your complete solution.

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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TechPro Inc. stock has a beta of 1.20 and its required
return is 14%. Greenfield Corp.'s stock has a beta of
0.95. If the risk-free rate is 5%, what is the required rate
of return on Greenfield's stock? Show your complete
solution.
Transcribed Image Text:TechPro Inc. stock has a beta of 1.20 and its required return is 14%. Greenfield Corp.'s stock has a beta of 0.95. If the risk-free rate is 5%, what is the required rate of return on Greenfield's stock? Show your complete solution.
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