Parr Paper's stock has a beta of 1.40, and its required return is 13.00%. Clover Dairy's stock has a beta of 0.80. If the risk-free rate is 4.00%, what is the required rate of return on Clover's stock? (Hint: First find the market risk premium.)
a. 8.55%
b. 8.71%
c. 8.99%
d. 9.14%
e. 9.33%
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