Given the following information, calculate the required return on this firm's securities: beta is 1.5, the risk- free rate is 6%, and the required return on the overall market is 9.
A) 10.5%
B) 12%
C) 13.5%
D) 4.5%

Question

Quizplus · Accepted Answer

The required return on this firm's securities can be calculated using the Capital Asset Pricing Model (CAPM):Required return = Risk-free rate + Beta * (Required return on the overall market - Risk-free rate)Required return = 6% + 1.5 * (9% - 6%)Required return = 6% + 1.5 * 3%Required return = 6% + 4.5%Required return = 10.5%

Given the Following Information, Calculate the Required Return on This