Calculate required rate of return

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Reference no: EM131924048

ABC Inc.'s stock has a 25% chance of producing a 10% return, a 50% chance of producing a 15% return, and a 25% chance of producing a -2% return. What is the firm's expected rate of return. (b) Calculate the required rate of return for ABC Inc., assuming that investors expect a 3.0% rate of inflation in the future, the nominal risk-free rate is 4.5%, expected market return is 11% and the firm has a beta of 1.50.

Reference no: EM131924048

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