Calculate the required rate of return for mudd enterprises


CAPM and required return

Calculate the required rate of return for Mudd Enterprises assuming that investors expect a 3.2% rate of inflation in the future. The real risk-free rate is 3%, and the market risk premium is 6%. Mudd has a beta of 1.2, and its realized rate of return has averaged 14.5% over the past 5 years. Round your answer to two decimal places.

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Financial Management: Calculate the required rate of return for mudd enterprises
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