Required return on common stock, Finance Basics

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Required return on common stock

Problem:

A company you are researching has common stock with a beta of 1.5. Currently, Treasury bills yield 4%, and the market portfolio offers an expected return of 13%.

Required:

Question: What is the required return on this common stock?

Note: Please show how you came up with the solution.

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Finance Basics: Required return on common stock

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Finance Basics: Required return on common stock

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