Section progress 3

From: Nadia Loomis, Team Lead

Subject: Help with John's Work

Hi,

John is out sick today. Can you take on some of his work? Below are his activities that we

need to complete today.

Thank you,

Nadia Loomis

Instructions

Task

Mikkelson corporation's stock had a required return of 12.50% last year, when the risk-free rate was 3% and the market risk premium was 4.75%. then an increase in investor risk aversion caused the market risk premium to rise by 2%. the risk-free rate and the firm's beta remain unchanged. what is the company's new required rate of return? (hint: first calculate the beta, then find the required return.) do not round your intermediate calculations.