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Now dana acquires some risky assets that cause its beta to

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Reference no: EM13485557

Data for Dana Industries is shown below. Now Dana acquires some risky assets that cause its beta to increase by 30%. In addition, expected inflation increases by 2.00%. 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

30.00%

Increase in inflation premium, IP

2.00%

Reference no: EM13485557

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