Difference in required returns for hri and lri, Finance Basics

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Difference in required returns for hri and lri

HR Industries (HRI) has a beta of 1.8, while LR Industries (LRI) beta is 0.6. The risk free rate is 6%, and the required rate of return on an average stcok is 13%. The expected rate of inflation built into rRF falls by 1.5 percentage points, the real risk-free rate remains constant, the required return on the market falls to 10.5%, and all betas remain constant. After all these changes, what will be the difference in the required returns for HRI and LRI?

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Finance Basics: Difference in required returns for hri and lri

Reference No:- TGS045039

Have a Question? (oR Write a Review)

Recent Questions Asked Finance Basics

Q : Evaluate present value of introduction of new chip

Q : What was the balance of the net pension asset/liability

Q : Prepare the amortization table

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Q : Difference in required returns for hri and lri

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Request for Solution File

Ask an Expert for Answer!!

Finance Basics: Difference in required returns for hri and lri

Reference No:- TGS045039

Recent Questions Asked Finance Basics

Q : Evaluate present value of introduction of new chip

Q : What was the balance of the net pension asset/liability

Q : Prepare the amortization table

Q : How us jobs is eliminated-increased by comparing viewpoints

Q : Difference in required returns for hri and lri

Q : Effective return on the money invested

Q : Function of the volatility of the business

Q : Discuss each element of a valid contract

Q : Should sweet products bid on red sugar candy business

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