Mikkelson Corporation’s stock has a required return of 11.75% last year, when the risk-free rate was 5.50% 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?Please provide step by step instruction.Thanks!
Mikkelson Corporation’s stock has a required return of 11.75% last year, when the risk-freerate was 5.50% and the market risk premium was 4.75%. Then an increase in investor riskaversion caused…