alleryStart learning →If the market return equals 14% and Rf is 8%, a beta of 1 gives Ke of
A8%
B6%
C14%
D22%
Answer & Solution
Correct answer: C. 14%
A beta of 1 means the stock earns the market return, so Ke = 8 + 1 x (14 - 8) = 14%.
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