Stock A's stock has a beta of 1.30, and its required return is 12.00%. Stock B's beta is 0.80. If the risk-free rate is 4.75%, what is the required rate of return on B's stock? (Hint: First find the market risk premium.)
A. 8.76%
B. 8.98%
C. 9.21%
D. 9.44%
E. 9.68%
Answer: C
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