The management of Quills and Ink want to calculate the required rate of return (ROR)of the company.The following information is available: $$\begin{array} { l l }
\text { Risk free rate } & 5.30 \% \
\text { Equity risk premium } & 4.24 \% \
\text { Firm size premium } & 2.16 \% \
\text { Industry risk premium } & 6.50 \% \
\text { Specific company risk premium } & 3.00 \%
\end{array}$$ Calculate the ROR of Quills and Ink.
A) 16.96%
B) 21.20%
C) 18.20%
D) 19.40%

Question

The management of Quills and Ink want to calculate the required rate of return (ROR)of the company.The following information is available: $$\begin{array} { l l } 
\text { Risk free rate } & 5.30 \% \
\text { Equity risk premium } & 4.24 \% \
\text { Firm size premium } & 2.16 \% \
\text { Industry risk premium } & 6.50 \% \
\text { Specific company risk premium } & 3.00 \%
\end{array}$$ Calculate the ROR of Quills and Ink.
A) 16.96%
B) 21.20%
C) 18.20%
D) 19.40%

Quizplus · Accepted Answer

The required rate of return is calculated by summing all the given premiums and the risk-free rate: 5.30% + 4.24% + 2.16% + 6.50% + 3.00% = 21.20%.

The Management of Quills and Ink Want to Calculate the Required