Rainbow Mining Pty Ltd is concerned that opening a new credit line will affect its share price.Now the company has a risk return on its shares of 17.50%,determined by using a beta factor of 1.50.The risk free rate is 7%.What is the market risk premium based on the information given for Rainbow Mining?
A) 11.86%
B) 5.50%
C) 7.00%
D) 17.50%
E) 10.50%
Correct Answer:
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