The risk-free rate of interest is 4% and the market risk premium is 9%
The risk-free rate of interest is 4% and the market risk premium is 9%. Howard Corporation has a
beta of 2.0, and last year generated a return of 16% with a standard deviation of returns of 27%. The
required return on Howard Corporation stock is
A) 22%. B) 34%. C) 36%. D) 26%.
ANSWER
A
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