Steam Corp. has a beta of 1.5. The prevailing risk-free rate is 5 percent, and the annual market return in recent years has been 11 percent. Based on this information, the required rate of return on Steam Corp. stock is ____ percent.
A)21.5
B)6.5
C)16.5
D)14.0
E)None of these are correct.

Question

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The Answer of Steam Corp. has a beta of 1.5. The prevailing risk-free rate is 5 percent, and the annual market return in recent years has been 11 percent. Based on this information, the required rate of return on Steam Corp. stock is ____ percent.
A)21.5
B)6.5
C)16.5
D)14.0
E)None of these are correct.