What is the stocks new required rate of return

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Data for Dana Industries is shown below. Now Dana acquires some risky assets that cause its beta to increase by 35%. In addition, expected inflation increases by 2.40%. What is the stock's new required rate of return?

Initial beta           1.00

Initial required return (rs)            10.20%

Market risk premium, RPM         6.00%

Percentage increase in beta        35.00%

Increase in inflation premium, IP              2.40%

Reference no: EM13915420

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