alleryStart learning →Beta is 1.2, Rf is 5% and the market risk premium is 6%. Find Ke.
A7.2%
B13.2%
C11.0%
D12.2%
Answer & Solution
Correct answer: D. 12.2%
Premium for risk is 1.2 x 6 = 7.2%, which added to 5% gives 12.2%.
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