John is considering investing in Stengar Industries Ltd., a Canadian common stock with a historic annual rate of return of 13.6%. The stock is 20% more risky than the portfolio of Canadian common stocks. If Government of Canada t-bills currently yield 3% and a portfolio of Canadian common stocks has a risk premium of 6.5%, what should be John's minimum acceptable rate of return if he invests in this stock?
A) 10.8%
B) 16.6%
C) 10.6%
D) 13.6%

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The Answer of John is considering investing in Stengar Industries Ltd., a Canadian common stock with a historic annual rate of return of 13.6%. The stock is 20% more risky than the portfolio of Canadian common stocks. If Government of Canada t-bills currently yield 3% and a portfolio of Canadian common stocks has a risk premium of 6.5%, what should be John's minimum acceptable rate of return if he invests in this stock?
A) 10.8%
B) 16.6%
C) 10.6%
D) 13.6%

John Is Considering Investing in Stengar Industries Ltd