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?
$$\begin{array}{l}
\begin{array} { | l | l | }
\hline \text { Initial beta } & 1.00 \
\hline \text { Initial required return } \left( \mathrm { r } _ { \mathrm { s } } \right) & 10.20 \% \
\hline \text { Market risk premium, RPM } & 6.00 \% \
\hline \text { Percentage increase in beta } & 30.00 \% \
\hline \text { Increase in inflation premium, IP } & 2.00 \% \
\hline & \
\hline
\end{array}\
\begin{array} { | l | l | l | }
\hline 1 . && 14.00 \% \
\hline 2 . && 14.70 \% \
\hline 3 . && 15.44 \% \
\hline 4 . && 16.21 \% \
\hline 5 . && 17.02 \% \
\hline
\end{array}
\end{array}$$

Question

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?
$$\begin{array}{l}
\begin{array} { | l | l | } 
\hline \text { Initial beta } & 1.00 \
\hline \text { Initial required return } \left( \mathrm { r } _ { \mathrm { s } } \right) & 10.20 \% \
\hline \text { Market risk premium, RPM } & 6.00 \% \
\hline \text { Percentage increase in beta } & 30.00 \% \
\hline \text { Increase in inflation premium, IP } & 2.00 \% \
\hline & \
\hline
\end{array}\
\begin{array} { | l | l | l | } 
\hline 1 . && 14.00 \% \
\hline 2 . && 14.70 \% \
\hline 3 . && 15.44 \% \
\hline 4 . && 16.21 \% \
\hline 5 . && 17.02 \% \
\hline
\end{array}
\end{array}$$

Quizplus · Accepted Answer

The Answer of 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?
$$\begin{array}{l}
\begin{array} { | l | l | } 
\hline \text { Initial beta } & 1.00 \
\hline \text { Initial required return } \left( \mathrm { r } _ { \mathrm { s } } \right) & 10.20 \% \
\hline \text { Market risk premium, RPM } & 6.00 \% \
\hline \text { Percentage increase in beta } & 30.00 \% \
\hline \text { Increase in inflation premium, IP } & 2.00 \% \
\hline & \
\hline
\end{array}\
\begin{array} { | l | l | l | } 
\hline 1 . && 14.00 \% \
\hline 2 . && 14.70 \% \
\hline 3 . && 15.44 \% \
\hline 4 . && 16.21 \% \
\hline 5 . && 17.02 \% \
\hline
\end{array}
\end{array}$$

For Dana Industries Is Shown Below A)1400% B)14

For Dana Industries Is Shown Below A)1400%
B)14