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Vantage is a Transportation Software Company with four main subsidiaries. The p...
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Vantage is a Transportation Software Company with four main subsidiaries. The percentage of its business coming from each of the subsidiaries, as well as their respective betas, are as follows:
Subsidiary
|
Percentage of Business
|
Beta
|
Electric utility
|
60%
|
0,70
|
Cable company
|
25%
|
0,90
|
Real estate
|
10%
|
1,30
|
International special projects
|
5%
|
1,50
|
Assume that the risk-free rate is 6% and that the market risk premium is 5%. What is the company’s required rate of return?
0%
0%
0%
100%