Business, 05.03.2021 05:00, Evey4851

Porter Plumbing's stock had a required return of 10.50% last year, when the risk-free rate was 5.50% and the market risk premium was 4.75%. Then an increase in investor risk aversion caused the market risk premium to rise by 2%. The risk-free rate and the firm's beta remain unchanged. What is the company's new required rate of return? (Hint: First calculate the beta, then find the required return.) Select the correct answer. a. 12.61% b. 11.71% c. 12.01% d. 12.31% e. 12.91%

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Porter Plumbing's stock had a required return of 10.50% last year, when the risk-free rate was 5.50%...