SOLUTION: Porter Plumbing's stock had a required return of 11.50% last year, when the risk-free rate was 5.50% and the market risk premium was 4.75%. Then an increase in investor risk aversi

Question 1149507: Porter Plumbing's stock had a required return of 11.50% last year, when the risk-free rate was 5.50% and the market risk premium was 4.75%. Then an increase in investor risk aversion caused the market risk premium to rise by 2%. The risk-free rate and the firm's beta remain unchanged. What is the company's new required rate of return? (Hint: First calculate the beta, then find the required return.)

a. 14.03%

b. 13.93%

c. 14.13%

d. 14.23%

e. 14.33%
Answer by ikleyn(52781) (Show Source): You can put this solution on YOUR website!
.

Let me explain you something.

There is the area of Math problems and there is the area of Finance problems.

There is some intersection of these two areas.

While the problem is in Math, we can help.

Even if the problem is in intersection area, we still can help.

But THIS problem is strictly in the Finance area, highly specialized.

In this area we CAN NOT help at this forum.

So, you simply waste your time, posting this problem and such problems to this forum.

Find another, more appropriate site for your needs.

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