All of the following factors affect the required rate of return except A) The economy's risk free rate. B) Corporate business risk. C) Return on equity. D) Country risk. E) Expected rate of inflation.

Question

Quizplus · Accepted Answer

The required rate of return is determined by a variety of factors, including the economy's risk-free rate, corporate business risk, country risk, and expected rate of inflation. However, the return on equity is not a factor that affects the required rate of return. Instead, it is one of the components of the required rate of return calculation when using the Capital Asset Pricing Model (CAPM).

All of the Following Factors Affect the Required Rate of Return